The Michigan Public Service Commission has approved an electric rate increase for DTE Energy of about $217 million – noting the increase was 52% less than the utility’s initial request to raise rates by about $456 million.
The commission said Thursday that a typical residential customer using 500 kWh a month will see an increase of $4.61, or 4.65%, in their monthly bill. The new rates will take effect February 6.
The commission said the revenue increase is meant to facilitate investments by DTE including:
- Continued upgrades to the utility’s legacy 4.8 kilovolt system in Detroit, Royal Oak, Birmingham and the Thumb. These types of downed wires can remain energized, endangering the public and extending restoration times. Ninety percent of the work will be in low-income and otherwise vulnerable communities, the commission said.
- DTE Electric’s ongoing tree-trimming surge program, to increase the frequency of tree trimming and other vegetation management around power lines. Fallen trees, limbs and branches account for about two-thirds of DTE Electric’s power outages, according to the company.
- Costs relating to areas in and near downtown Detroit, including Highland Park, that face challenges with poor reliability because of aged equipment, lack of space for new equipment, and high failure rates.
- Increasing DTE Electric’s low-income utility bill assistance credit from $40 to $50 a month for enrolled customers whose household income is at or below 150% of the federal poverty level.
- Electric vehicle investments to support charging infrastructure as more drivers opt for EVs, including $12.5 million in capital expenses for DTE Electric’s Charging Forward program in 2024 and $5.1 million in 2025.
The commission did not approve DTE Energy’s request to recoup the costs of power outage bill credits due to vehicle crashes, contact with animals, or ice, wind, lightning or other weather. “It is the utility’s responsibility to harden its grid to better withstand these events,” the commission said in a news release.
The commission also rejected $258,000 in corporate jet travel the company sought to recover from ratepayers, saying the company did not demonstrate how the expense benefited ratepayers.
A DTE spokesperson said the company’s recent monthly bill reduction of about $5 a month for customers completely offsets the new rate increase.
A coalition of environmental groups said it was pleased the commission prioritized spending on reliability and EV spending, but said there is room for more investment on equity and energy justice, as well as non-conventional energy alternatives like batteries and microgrids.
Amy Bandyk, executive director of the Citizens Utility Board of Michigan, a utility watchdog group, was more critical of the revenue increase.
She said a recent third-party audit "confirmed that DTE’s grid management practices are woefully sub-standard. So while the MPSC’s decision to cut DTE’s rate hike request by 52% is a start, the MPSC’s order did not go nearly far enough to send DTE the message that it needs to change its ways. It’s not a matter of having enough money to improve the grid – it’s a matter of what DTE does with it."
“CUB is also disappointed that the commission did not reduce DTE’s return on equity below the current 9.9%. Reducing that return, which generates profit for DTE shareholders from the bills of customers, would have sent a strong message that DTE needs to improve its performance.”
DTE Energy is among Michigan Public's corporate sponsors.
