The Department of Attorney General filed testimony before the Michigan Public Service Commission (MPSC) to advocate for reducing Consumers Energy’s requested rate increase by over 50% and reducing the increase in residential rates to less than 3%, Attorney General Dana Nessel announced last Friday.
Consumers Energy filed its application to the MPSC seeking a rate increase of approximately $274 million ($266 million for the Michigan jurisdiction) on April 28, 2022, to be implemented in 2023. If the company’s proposal is approved as filed, the overall rate impact would be an increase of 6.5% for all rate classes with the impact on residential being an increase of 6.8%.
The Department of Attorney General retained an expert witness and through expert witness testimony Nessel recommended among other things, that rates be increased by $123.8 million at most with residential customers receiving a 2.88% or 63.1 million rate increase compared to the $145.2 million increase that they would receive under Consumers proposal. The overall rate increase for all ratepayers would be 3.02%.
“Michigan consumers are already struggling to make ends meet,” said Nessel. “They simply cannot afford a substantial increase in the cost of their utility bills, and I am committed to using the resources of my office to ensure no resident pays more than is absolutely necessary for reliable energy.”
In addition to the proposed reduction to Consumers request, Nessel recommended that that the Commission establish a revenue deferral mechanism to ensure that the company is held accountable to achieve service reliability goals. Under the attorney general’s proposal, a Service Reliability Accountability Mechanism (SRAM) would be established requiring Consumers to defer 20% of the revenue related to certain reliability related programs subject to meeting certain reliability goals. If the company fails to meet the goals, the deferred amount would be refunded to ratepayers since the failure indicates that ratepayers did not receive the reliable service they paid for.
The attorney general’s expert testimony also challenged Consumers Energy to reduce the amount it proposes to spend in this case on capital expenditure and operating costs when it files its rebuttal testimony to provide relief to ratepayers in light of the higher cost-of-living due to inflation across the economy and implored the Commission to adopt his and other parties’ proposed reductions to the company’s requested rate increase to provide relief to ratepayers. Consumers Energy has until September 15, 2022, to file rebuttal testimony.
Consumers Energy provides electricity to approximately 1.9 million people throughout Michigan and natural gas to 1.8 million customers across the state.
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