The Michigan Public Service Commission approved a 4.7% rate increase for DTE customers last week — less than the 9% increase DTE had requested in their June 2019 filing. The decision also requires the utility to propose a system to link its performance with profits and to engage with community stakeholders in its next rate case.
Increased rates are set to begin for all DTE customers Friday.
DTE had previously announced that customers would save 3-4% this summer in bill relief due to the coronavirus shutdown resulting in cheaper electric generation costs.
Chris Lamphear, a corporate communications manager for DTE, wrote in an email, “We recognize that the COVID-19 crisis had an unfavorable impact on many of our customers and that is why we are providing up to $40 million in summer bill relief to lessen the impact.”
However, with this new rate increase, customers will still be paying more for their electricity this summer.
On making this decision amid the pandemic, MPSC Chairman Sally Talberg said in a press release, “There are pressing needs to upgrade aging infrastructure to ensure safe, reliable electric service.”
Some advocates don’t agree. “It’s absurd that they would go through with a rate increase during a pandemic,” Bridget Vial, an organizer at the Michigan Environmental Justice Coalition, told Planet Detroit.
Going into the coronavirus crisis, DTE rate hikes were the second-highest in the country despite lagging reliability.
Vial says that the MPSC “seems to walk a line in between what the Administrative Law judge recommends and what DTE files as a request”, calling the ruling a “perfect average” of the two.
The judge determined that DTE had asked for $1 billion more than necessary to maintain safe and reliable electricity, according to a joint press release by community advocates.
Lamphear said that some of the increased revenue will go towards addressing new reliability standards set forth in the decision, which requires DTE to develop a proposal for a system of “performance-based regulation.”
Poor reliability has been a concern raised by multiple advocacy groups, as described in a report by the Citizens Utility Board of Michigan (CUB), an organization that represents residential customers in rate cases.
CUB Executive Director Amy Bandyk argues in a blog post on CUB’s website that the MPSC’s decision to require DTE to propose a plan that would link their profits to performance is “one of the most important decisions” that the commission will make in 2020. “It signals that a big change might be coming in the relationship between regulators and investor-owned utilities,” she writes.
In addition to reducing DTE’s requested rate increase, the MPSC reduced DTE’s requested increase on equity returns, rejected its request to convert the River Rouge plant from coal to natural gas, and rejected a fund request for information technology projects, according to the MPSC press release. In DTE’s next rate case, MPSC will require the utility to create a community transition plan that incorporates community voices.
Soulardarity Executive Director Jackson Koeppel calls the decision an “okay start,” adding that he’s seen some of DTE’s previous attempts to work with community partners left some community members feeling “strung along.”
“DTE no matter what the circumstances, pandemic or not, is still making shareholders a priority,” said Shimekia Nichols, communications coordinator at Soulardarity.
Koeppel says that until the MPSC orders DTE to do solar projects that benefit low-income people and the community and not their stakeholders, they likely won’t unless they’re “legally required to do so.”
Nearby in Ann Arbor, Missy Stults, the city’s Sustainability and Innovations Manager, told Planet Detroit, “We’re acutely aware of the disproportionate energy burden that our low-income and minority populations are bearing.” She said the DTE rate increase is exacerbating that effect.
“We continue to have these rate increases for electricity when we’re not investing in the right thing, which is not using it in the first place,” Stults added. “Inefficiency wastes large amounts of money and people aren’t taking that seriously.”