Judge’s Proposal Rejects DTE’s Extreme Rate Increase

LANSING, MI (March 12, 2019) -- The Michigan Public Service Commission received a recommendation late last week from an Administrative Law Judge (ALJ) to partially strike down the controversial $328 million rate increase requested by DTE. Michigan Environmental Council (MEC), Natural Resources Defense Council (NRDC) and Sierra Club are co-intervenors in the rate case before the Public Service Commission and advocated for significant cutbacks to DTE’s request.

The initial rate increase proposed by DTE would have disproportionately impacted low income customers and seniors on a fixed income by increasing the fixed charge on all residential customers from $7.50 to $9.00. DTE’s proposal would have also raised rates by 10 to 13 percent for commercial and industrial customers, 19 percent for residents, and 26 percent for public lighting customers like municipalities.

The ALJ recommended steep cuts in the requested rate increases and the denial of the fixed charge increase. The ALJ recommended approving only $113 million of the $328 million, or about one third of what DTE originally requested, increasing rates by a much smaller amount than originally proposed by the utility.

“Michigan’s residential ratepayers, particularly low-income customers and seniors, are already saddled with unnecessarily high energy bills, and DTE’s rate request would have accelerated that concerning trend,” said Michigan Environmental Council Energy Policy and Legislative Affairs Director Charlotte Jameson. “While rates for DTE’s residential customers would still increase under the judge’s proposal, the denial of DTE’s most egregious cost requests will help minimize that increase. This recommendation is a step in the right direction, but we can and should be doing more to curb costs for residential customers by closing uneconomic coal plants, moving towards low cost renewables, and ramping up energy waste reduction.”

“DTE is asking the Commission for a rate increase for the fourth time in five years. Some issues in the case, like the distributed generation tariff, are new, but year after year, we've been fighting fixed charge increases," said Ariana Gonzalez, Senior Energy Policy Analyst with Natural Resources Defense Council. “To DTE, each year brings another bite at the apple, but advocates and the Commission are there to ensure the utility doesn’t overeat.”

“Electric rates for residential consumers have been rising dramatically in Michigan, while rates for industry stay the same,” said Rhonda Anderson, Organizing Manager with the Sierra Club’s Environmental Justice and Community Partnerships program. “Underserved communities in Michigan experience the bulk of the health consequences from the pollution produced by industry, but industry gets utility rates subsidized by the same working families whose communities are being polluted. This decision, which touches on everything from ratepayer costs to rooftop solar to the transition away from dangerous coal burning, is a breath of fresh air to communities choked by pollution.”

The Michigan Public Service Commission is expected to issue a final order on DTE’s rate case on May 6, 2019.