Michigan regulator targets utility rate hikes
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Maura Losch/Axios
Michigan's utility regulator says some of the rules governing DTE Energy and Consumers Energy can unnecessarily raise customer costs — and it wants lawmakers to change them.
Why it matters: Years of rate increases and long-running reliability concerns have fueled frustration with Metro Detroit utilities.
- After severe storms over the July 4 weekend, nearly 400,000 DTE customers lost power, with some waiting almost a week for service to return.
Between the lines: The Michigan Public Service Commission’s recommendations go beyond the usual debate over whether an individual rate increase is justified. The commission says the regulatory system itself can encourage utilities to spend more than necessary.
What's inside: One of the commission’s simplest proposals would end what it calls “effectively annual” utility rate cases seeking to raise rates.
- Michigan law allows utilities to seek new rates every 12 months.
- The MPSC wants lawmakers to authorize multiyear rate plans instead, with utility earnings tied more closely to reliability and affordability rather than repeated annual filings.
Flashback: DTE won approval for a $242.4 million increase in February, then sought another $474.3 million in April. Consumers won approval for $276.6 million in March, then sought another $456 million in June.
The big picture: The proposal is part of a broader package Gov. Gretchen Whitmer requested as concerns grow over energy affordability.
- The commission is also asking lawmakers to change financial incentives that it says can favor building new infrastructure over potentially cheaper alternatives.
The other side: DTE said it is still reviewing the recommendations and declined to address individual proposals. The company emphasized that customer bills remain below regional and national averages and that outage times have improved.
- Consumers Energy said some of the recommendations “could unintentionally undermine” efforts to balance affordability with needed grid investment.
Meanwhile, state Rep. Dave Prestin (R-Cedar River) pushed back on the commission's diagnosis, arguing Michigan's 2023 clean-energy law is a bigger cause of rising costs than the regulatory incentives targeted by the MPSC.
- Prestin, vice chair of the House Energy Committee, tells Axios that some of the MPSC's ideas have merit but calls much of the package an “ornamental wish list” unless lawmakers also revisit that law.
What’s next: Many of the commission's proposed changes require legislative approval, setting up a debate over whether Lansing will rewrite the rules governing Michigan's utilities.