On Monday, Michigan Attorney General Dana Nessel filed testimony in Michigan Gas Utilities Corporation’s (MGU) current rate increase request case open before the Michigan Public Service Commission (MPSC).
MGU is requesting to raise residential rates by over 12%, citing a revenue deficiency of $17.6 million. However, after carefully reviewing and scrutinizing MGU’s rate hike request, the department believes $14.6 million of that sum should be disallowed, resulting in a residential rate increase of less than 3%. For example, the attorney general found $3.2 million in reductions are necessary as a result of the lack of support and inadequate justification for capital projects, such as pipeline replacements, smart meters, and IT software. And, another $8.4 million in reductions as a result of excessive or unnecessary operations and maintenance expenses such as third-party contractual services and incentive compensation programs for executive level employees where the majority of the incentives are for improving the financial performance of the company versus improving customer services or benefits.
“As we have come to expect, investor-owned utilities are consistently over-inflating their revenue shortfalls to pump up exaggerated rate hike requests,” Nessel said. “MGU is seeking to pad the pockets of its investors and executives rather than putting forward a forthcoming assessment to the MPSC. My office will vigorously pursue reasonable and prudent rates for our utility customers, as we do with every rate case that comes before the
Michigan Public Service Commission.”
MGU serves approximately 185,000 natural gas customers in southern and western Michigan. Nessel encourages MGU customers to submit their own comments on the Commission’s e-Docket for this matter, U-21540.
Screenshot instructions for filing comments on e-Dockets can be found on the recently released AG Utility webpage at www.michigan.gov/ag/initiatives/utilities.
MGU is requesting to raise residential rates by over 12%, citing a revenue deficiency of $17.6 million. However, after carefully reviewing and scrutinizing MGU’s rate hike request, the department believes $14.6 million of that sum should be disallowed, resulting in a residential rate increase of less than 3%. For example, the attorney general found $3.2 million in reductions are necessary as a result of the lack of support and inadequate justification for capital projects, such as pipeline replacements, smart meters, and IT software. And, another $8.4 million in reductions as a result of excessive or unnecessary operations and maintenance expenses such as third-party contractual services and incentive compensation programs for executive level employees where the majority of the incentives are for improving the financial performance of the company versus improving customer services or benefits.
“As we have come to expect, investor-owned utilities are consistently over-inflating their revenue shortfalls to pump up exaggerated rate hike requests,” Nessel said. “MGU is seeking to pad the pockets of its investors and executives rather than putting forward a forthcoming assessment to the MPSC. My office will vigorously pursue reasonable and prudent rates for our utility customers, as we do with every rate case that comes before the
Michigan Public Service Commission.”
MGU serves approximately 185,000 natural gas customers in southern and western Michigan. Nessel encourages MGU customers to submit their own comments on the Commission’s e-Docket for this matter, U-21540.
Screenshot instructions for filing comments on e-Dockets can be found on the recently released AG Utility webpage at www.michigan.gov/ag/initiatives/utilities.
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