DTE Energy secures $242 million electric rate increase: How much bills rise next month

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Michigan regulators approved a $242.4 million electric rate hike for DTE Energy Thursday, or less than half the $574.1 million increase the utility requested.

The hike represents a 4.1% increase in the size of residential DTE bills.

Customer bills will rise by $4.93 per month starting March 5, DTE said in a press release, adding that the funds “help support continued, targeted investments that are improving electric reliability and strengthening the grid across Southeast Michigan.”

Thursday’s increase follows a $217 million electric rate hike approved by the Michigan Public Service Commission (MPSC) in January 2025.  

In August, Michigan Attorney General Dana Nessel filed testimony asking the MPSC to approve an increase of $158.4 million, a roughly 72% reduction of DTE’s request that would have represented a 2.5% jump in the average utility customer’s bill.

“Since 2020, the MPSC has approved more than $1 billion in annual revenue increases for DTE, despite continued reliability and affordability concerns,” Nessel said in a Thursday statement.

“Michiganders deserve accountability and results from their ballooning utility bills, and I will continue to advocate for the ratepayers of this state ahead of our utility corporations’ profits and shareholder dividends.”

DTE said in its rate hike application that the increase is needed to support the conversion of the Belle River Power plant from coal to natural gas; complete the Trenton Channel Battery Energy Storage System; and decommission the mothballed River Rouge, St. Clair, and Trenton Channel power plants.

The MPSC said it “cut funding for programs that were not effective, not supported, or poorly planned, focusing its approved investments only on what is reasonable and prudent and providing benefits to customers,” the commission said in an explanation of the rate hike that was approved versus the amount requested by DTE.

The commission approved a 9.9% return on equity for the company, below the 10.75% return requested by DTE, but above the national utility industry average of 9.6% in 2023, per S & P Global.

The return on equity generates profits for shareholders and is defined at the net income of a utility’s gas or electric operation divided by shareholders’ equity.

Amy Bandyk, executive director of the Citizens Uitility Board of Michigan, said the MPSC should “reconsider its unwillingness to reduce DTE’s ROE.”

Cutting the utility’s ROE would save customers money and make DTE less focused on capital investments, which allow it to collect a high return, and more willing to focus reliability improving measures like shortening tree trimming cycles, she said.

Bandyk praised the MPSC’s denial of DTE’s request to in some cases lengthen its tree trimming cycle, instead keeping a five-year trim cycle.

The MPSC approved an Infrastructure Recovery Mechanism of $348.8 million for 2026 and $282.5 million for 2027 to support grid investments.

On Tuesday, DTE reported $1.53 billion in operating earnings in 2025, more than $100 million higher than its earnings in 2024. 

On a company earnings call, DTE Chief Financial Officer Dave Rudd cited the “implementation of new base rates” as one of the drivers for the earnings increase along with favorable weather and lower storm expenses.

MPSC proposes increased energy assistance funding

The MPSC also proposed an increase to the funding factor that supports the Michigan Energy Assistance Program, or MEAP, on Thursday. This program provides eligible low-income households with help paying energy bills and other services.

Legislation passed in 2024 approved raising the monthly per-meter charge to $2 over time and lifted the annual cap on how much funding these charges can raise.

The commission proposes increasing this funding factor to $1.50 per meter, limited to one meter per residential site, and is seeking public comment.

If adopted, the $1.50 monthly charge could generate $90 million over the next fiscal year, a 20% increase from the $75 million for the current year, the MPSC said in a statement.

Editor’s note: This story has been updated with additional details.

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