State approves rate increase for Consumers Energy electric

Published: Jan. 19, 2023 at 4:43 PM EST
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LANSING, Mich. (WILX) - The Michigan Public Service Commission approved a seventeen-party settlement agreement that grants a $155 million rate increase for electric customers of Consumers Energy Co.

The increase amount is a 43% reduction from what the utility initially sought (Case No. U-21224). Three additional parties signed statements of non-objection.

Consumers initially requested to raise rates by $272 million, a figure the company later raised to $293.5 million. The settlement agreement filed in Dec. reduced the amount to $155 million. The agreement also permits the company to implement a surcharge to recover $6 million for a 2021 distribution deferral.

A typical residential customer using 500 kilowatt hours a month will see an increase of $2.10, or 2.06%, on their monthly bill. After 12 months, the customer will see a decrease of $1.33, or 1.28%, monthly due to the net effect of a surcharge and credit expiring, for a net overall increase from a monthly bill under current rates of $0.77, or 0.75%.

Consumers will provide a one-time voluntary refund of $15 million in revenue from 2022 to be applied to customer bills through a monthly credit for 12 months once new rates go into effect Jan. 20. Consumers also will make a $10 million shareholder-funded contribution to programs helping low-income and payment-challenged customers.

Among other highlights of the settlement agreement:

  • Consumers will enhance the utility’s electric vehicle pilot programs for, respectively, residential and commercial customers.
  • Consumers agrees to double the cap on its metering program from the current 2% of the utility’s average in-state peak load for full-service customers to 4%. The rate at which Consumers compensates rooftop solar customers for excess power they generate also will be based on power supply rates that factor in transmission costs.
  • The company will propose a program to integrate line-clearing that targets the worst performing load concentration point zones into its line clearing program in the utility’s next rate case.
  • The utility will propose a pilot for electrifying residential use of propane. The pilot, with a goal to include 2,000 homes over three years, will prioritize electrification of space heating.
  • Consumers will provide a straw proposal recommendation on community solar in its voluntary green pricing program filing by October 2023.

This settlement also includes Consumers conducting customer outreach following the filing of its next rate case to provide opportunity for input to the public; providing an analysis of reliability and hosting capacity for customers in environmental justice communities in its next rate case; and incorporating environmental justice and equity into the company’s distribution system planning.

The settlement agreement sets Consumers’ authorized rate of return on common equity at 9.9% and with a common equity ratio of 50.75%.

View cases from today’s meeting at the MPSC’s E-Dockets filing system.

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