Public Service Commission approves DTE rate hike requested for reliability upgrades

The Michigan Public Service Commission on Friday approved a $368 million rate increase for DTE Energy that is set to take effect on Dec. 15. 

According to a statement from the commission — which regulates energy companies in the state — residential customers using 500 kilowatt hours of electricity a month can expect to see a $6.51 increase on their monthly bill. 

DTE, one of the state’s largest energy companies, initially requested $622 million to fund reliability upgrades and transition to cleaner energy sources. According to a statement from the company, the increased rates will help support its plan of improving reliability by 60% over the next five years. 

The company has faced frequent criticism for charging high rates for unreliable energy service. Earlier this year, DTE came under scrutiny from lawmakers after a severe ice storm at the end of February left hundreds of thousands of DTE customers without power for days.

According to DTE, the commission’s decision on Friday will support its efforts to update existing infrastructure, rebuild older sections of the grid, continue tree trimming efforts, and shift to a “smart grid” which will help the company to quickly deploy crews to damaged areas and isolate the outage in some cases so power can be rerouted for customers while repairs are being made.

Michigan Attorney General Dana Nessel, whose office intervened in the case, said the initial requested amount was the largest requested increase her office had ever seen, and that her office would review the request to ensure customer interests were protected. 

“That is exactly what we did, and [Friday’s] commission order validates the extensive work my office did in an attempt to limit any rate increase to reflect reasonable expenditures,” Nessel said in a statement. 

“While I am pleased the Commission limited the increase, I recognize that $368 million is still a tremendous rate increase and is too high for many ratepayers especially right before the holidays. I will remain a vocal proponent for the interests of utility customers and urge the Legislature to pass measures compelling DTE to demonstrate this money is being utilized to ensure more reliable service and not to enrich its shareholders,” Nessel said.

DTE also offered its own estimate on how the rate increase would impact customers, based on a $300 million reduction in fuel costs expected in 2024. Based on the company’s estimate, customers would see an increase of $2.56 per month. 

Following the approval of the order, a coalition of energy democracy, environmental justice and consumer advocacy groups spoke out against the rate increase, saying the commission “failed ratepayers.”

“While it’s a relief that the commission recognized the absurdity of DTE’s original request, this was an opportunity for the MPSC to truly hold the utility accountable for failing to provide reliable, affordable, and equitable service,” Erik Shelley, an environmental justice organizer for Michigan United said in a statement. “Sadly, the commission squandered that opportunity by approving yet another rate increase.”

Rafael Mojica, the program director at Soulardarity, a Highland Park-based nonprofit advocating for energy democracy, said the burden of this increase will fall most heavily on low-income communities and communities of color. 

While DTE filed its rate case application with the MPSC in February, House Minority Floor Leader Bryan Posthumus (R-Cannon Twp.) blamed recently-signed clean energy policies for the increase. 

DTE has asked to increase its electricity rates almost every year since 2018.  

“While the Governor has been saying her Green New Deal would save people money, it only took a couple weeks to prove that to be a lie.” Posthumus said in a statement. “Turns out all that pie in the sky is actually pretty expensive; green energy fairy tales don’t pay for themselves.”

During the meeting MPSC Commissioner Katherine Peretick said investment into the distribution system is needed to improve reliability, but the commission would be watching to ensure the investments work as intended. 

“The reliability of our electric distribution system in the face of increasing severe storms is unacceptable and the only way to improve is to fix the system,” Peretick said. “We’ll be watching closely to ensure that these investments have the intended effect of reducing the frequency and duration of outages in our state.”

DTE is also in the midst of a distribution system audit focused on reducing the number and duration outages and identifying needed safety improvements. Liberty Consulting, the independent third party conducting the audit, is expected to file its final report in late summer 2024.