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DTE met with opposition after filing to increase rates on average by 11% per household

AG Nessel challenges $195M rate increase
Posted at 11:15 PM, Jun 08, 2021
and last updated 2021-06-08 23:22:19-04

(WXYZ) — Just as signs point to an economic recovery from the pandemic, and as many of us are returning to work, portions of those paychecks may be heading toward increased utility bills.

RELATED: AG Nessel: DTE's $195M rate increase request is 'excessive and unreasonable'

DTE Energy has filed a rate increase request for its gas services to the tune of $195 million, which would bump the average bill up 11 percent for residential customers.

Michigan's attorney general is hoping that jump is closer to two percent. AG Dana Nessel has intervened in the proceeding, which now sits before Michigan's Public Service Commission for a decision.

For so many in the American labor force, the pandemic turned 2020 into a year of struggle that's carried over to 2021. Storefronts closed and unemployment hitting record levels in Michigan. However, fortunes seem favorable for at least some utility companies. In April, DTE Energy announced $397 million in first-quarter earnings, a roughly 17 percent increase from 2020.

Nonetheless, the energy company that provides natural gas for 1.3 million customers is requesting to increase its gas rates by $195 million. Rates for its 2.2 million electric customers were approved to go up by $188 million in May of last year.

The gas increase would bump the average residential customer's bill up by 11 percent. Some believe the timing of this increase is tough.

Michigan's Attorney General Dana Nessel has intervened in the case as a consumer advocate, arguing that DTE's request is excessive and unreasonable.

“Michiganders have been through a lot over the past year-plus, and I want to help make sure ratepayers are not blindsided by large increases in utility bills just when we are starting to see signs of returning to normalcy,” Nessel said.

RELATED: AG Nessel seeking to reduce DTE requested rate hike by 90%

The attorney general's filing comes as energy use is on the rise. We're in warmer temperatures and there's more air conditioning output. Consumers Energy – the other leading utility company in Michigan serving electricity for 1.6 million customers – is increasing its rate by 50 percent during peak afternoon hours of 2 p.m. to 7 p.m. through September.

Will more Michigan energy consumers see rate increases, and if so, when?

Here's an abbreviated version of how the process works. It's somewhat like a court proceeding:

An energy company files a request to increase rates with the governing body that sets the rates, which is called the Michigan Public Service Commission (MPSC).

The company explains why they're requesting the increase.

Those affected by the proposed change can file a petition to intervene, as AG Nessel has done, and includes testimony and exhibits.

There's a cross-examination. The MPSC ultimately weighs the arguments and makes a decision. They can approve the full amount, reject the request, or modify it as they did in May of last year when DTE requested a $351 million increase and the MPSC approved just $188.3 million.

DTE said in a statement to 7 Action News: "We appreciate and share the attorney general's concern to keep energy costs affordable. We look forward to working through the rate case process to demonstrate how our investments in the natural gas system will improve reliability, reduce emissions, maintain safety, and keep costs to a minimum.

The filing helps DTE to continue implementing recommendations from the 2019 Statewide Energy Assessment and is a culmination of comprehensive studies and forecasting to determine what is needed to continue providing our customers with safe, reliable, affordable and clean natural gas. Natural Gas continues to be the most affordable heating solution; in fact, gas commodity costs are down 30% over the last ten years. When the cost of natural gas drops, DTE passes the savings on to consumers and is a longtime supporter of agencies that provide financial assistance to vulnerable customers."