Michigan Attorney General Dana Nessel has filed expert testimony with the Michigan Public Service Commission in two separate dockets requesting they disallow recovery of nearly $18 million of excess natural gas costs billed by DTE Gas Company and DTE Electric Company to its customers during 2022 and part of 2023.
The excess gas costs arise from a utility-friendly gas transportation contract that DTE signed in 2014 with a formerly affiliated interstate pipeline company, NEXUS Transmission Company (NEXUS).
The initial justification from DTE to its customers and the Commission was that NEXUS would transport gas supply from the Appalachian region at significantly lower prices than available from other existing pipelines. The premise was that these savings would more than offset the significantly higher cost of transportation charged by NEXUS. In reality, there have been no cost savings and, according to industry experts and other parties participating in the proceedings before the Commission, the purported savings are not likely to occur in the future.
“It has become increasingly clear that the phantom savings DTE promised its customers when it struck a deal with NEXUS are never going to happen,” said Nessel. “Instead, customers are needlessly paying
millions of dollars annually to enrich a former DTE affiliate. The Commission should never have allowed these ratepayer bailouts, and we’re imploring them to reconsider this practice.”
Since NEXUS began operation in November 2018 and through the end of the 2022 fiscal period, DTE Gas and DTE Electric have overcharged their customers in excess of $80 million due to the arrangement with NEXUS, and they have been continually allowed to do so by the Commission. Although the Commission has approved recovery of a portion of these excess costs in prior years, the attorney general requests that beginning with the open cases in U-21065 and U-21051, the Commission disallow recovery of $17.6 million of excess costs and order the two DTE subsidiaries (gas and electric) to return that total amount to DTE bill-payers. Under the Attorney General’s request, DTE Gas customers should be refunded $7.5 million and DTE Electric customers should receive $10.1 million for overcharges billed primarily in 2022.
The attorney general encourages the Commission to closely re-evaluate its prior decisions, which have permitted DTE to recover costs billed by a former affiliate above costs billed by competing pipelines under a very favorable gas transportation contract with NEXUS. Michigan utility customers are already paying utility bills above what other utilities charge to their customers in surrounding states and the Attorney General’s request to disallow a portion of excess gas costs will hold DTE accountable to minimize fuel costs for customers and help alleviate the utility cost burden on Michigan ratepayers.
