On Wednesday, the Michigan Public Service Commission (MPSC) approved a settlement in Consumers Energy Company’s natural gas rate case in which the Company sought a rate increase. Michigan Attorney General Dana Nessel intervened in the case and helped secure a 55% reduction in the final requested rate increase from $175 million to $95 million and an elimination of an initially requested $2-per-month increased service charge for all residential and some commercial customers.
Consumers Energy filed its request seeking an annual increase in revenues of approximately $212 million with the MPSC in December 2022. Unopposed, the Company’s request would result in a 7.8% increase in rates for all ratepayers including the company’s residential customers.
The attorney general filed testimony arguing that, based on current rates, Consumers Energy should only receive a rate increase of approximately $52.3 million, adjusted to $52.7 million after further review. Nessel also opposed the company’s proposed $2 increases to monthly service charges for residential and small commercial customers. In response to issues raised in testimony by other parties including the attorney general, the Company reduced its requested rate increase to $175 million.
The settlement provides the utility with sufficient revenues to provide its customers with safe and reliable natural gas service and to perform necessary repairs and upgrades to its infrastructure at more reasonable rates than projected by the company. Consumers Energy abandoned the proposed increase in monthly service charges as part of the settlement. The settlement results in an overall rate increase of 4.0% but only an average rate increase of 3.9% for residential ratepayers. This settlement is a continuation of the attorney general’s efforts to seek and obtain significant rate relief for utility customers.
“My office takes very seriously its commitment to defend Michigan consumers, and often that means defending utility customers from exorbitant and constant rate hike requests before the state,” said Nessel. “We are defending the pocketbooks and household ledgers of Michigan consumers throughout the year from our largest energy providers. The settlement announced today saves ratepayers millions, slashes the rate hike demand in half, and completely blocked an unnecessary intended service fee increase that otherwise would have landed on the utility bills of every residential Consumers Energy natural gas customer in Michigan.”
Consumers Energy provides electricity to approximately 1.9 million customers throughout Michigan and natural gas to 1.8 million customers across the state.
Also on Wednesday, the Michigan Public Service Commission (MPSC) approved a settlement in Michigan Gas Utilities Corporation’s (MGUC) rate increase request after Nessel, alongside the Citizens Utility Board of Michigan (CUB), intervened to secure a nearly 50% reduction in the requested rate increase from $19.1 million to $9.9 million as well as a reduction in the corporation’s return on equity from 10.4% to only 9.8%, which is the lowest in the state for investor-owned utilities.
In March, MGUC filed this request to increase its gas rates by $19,114,362 along with a request for a 10.4% return on equity. If approved as filed, the rate increase for residential customers would have been approximately 11.76%. MGUC’s last rate increase was approved two years ago.
“Similar to the large rate cases impacting millions of Michigan consumers, my office aggressively fights for, and wins, reduced energy costs for all utility customers across this state,” said Nessel. “My office and our partners were able to slash this requested rate increase almost in half. Utility customers who would have faced the almost twelve percent rate hike, as the utility requested, will now only bear an effective increase of 2% per year since the last rate increase from their natural gas provider.”
"This settlement provides much-needed rate relief for MGU customers. Michigan residential customers spend more on natural gas than their neighbors in Ohio, Indiana and Wisconsin do, as shown by data from CUB's Utility Performance Report," CUB Executive Director Amy Bandyk said. "The lower costs for residential customers thanks to this settlement are a step in the right direction."
The Citizens Utility Board of Michigan (CUB) is a nonpartisan Michigan non-profit dedicated to making utility costs more affordable for Michigan residents.
More information on this case can be found on the Commission’s website (https://mi-psc.force.com) under docket number U-21366.
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