(WXYZ) — The Michigan Public Service Commission on Friday approved a rate increase for DTE Electric Company customers to fund infrastructure investments designed to increase reliability and accelerate the deployment of clean energy generation.
The $368 million rate increase represents an overall reduction from the $622 million the company originally requested in February.
The new tariffs come into force on December 15th.
According to the MPSC, a typical residential customer using 500 kilowatt hours of electricity per month will see an increase of $6.51 in their monthly bill, which is 6.38%.
In response, DTE Energy said that while the MPSC figure is accurate, it does not take into account the $300 million in cost savings announced in November that should be passed on to consumers. DTE says these cost savings and the rate increase combined would mean a net impact to customers of less than $3 per month.
“An electric bill is actually made up of two parts, the base price and the fuel price,” explained Trevor Layer, vice chairman and group president of DTE Energy. “We are reducing our fuel costs… by $300 million, effective today.”
Customers like Yolanda Bradford say another rate hike would be too generous for the company.
“I don’t think it’s justified,” she said. “We had another power outage and the next year and this very August we had two back-to-back power outages.”
Layer says the rate hike will be helpful for exactly that reason, as they use the funds to try to modernize their systems.
“I guarantee you, our team works every day to reduce power outages for every customer. And if there is a power outage, we want there to be shorter power outages than you might have had before,” he said.
The rate increase was one of several measures related to DTE Electric passed by the MPSC. Other measures include the approval of financing measures, including an investment recovery mechanism. The approval was given a time limit to allow it to be adjusted to the results of an ongoing audit of the distribution system.
A final report on this audit is expected in late summer 2024.
The commission also approved $2 million in additional funding for DTE Electric’s pilot project to provide income-eligible households with a $1,500 rebate for purchasing electric vehicles for $50,000 or less to remove trees and branches in near power lines.
In addition, the commission directed DTE to work with them to investigate the cutting of trees on residential utility lines – the power lines between utility poles and homes – and directed the company to submit a proposal for a tree-trimming pilot project at its next general meeting Residential areas to develop tariff case.