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Advocates in Michigan say unprecedented public engagement helped push state regulators to reject most of a utility’s proposed rate increase last week.
At an August public hearing, ratepayers and consumer advocates laid out a case that DTE Energy already had plenty of money to improve service, a point of contention following major power outages over the last two years.
The Michigan Public Service Commission agreed, approving a $30.5 million rate increase for DTE Energy’s electric customers on Friday, rejecting 90% of what DTE had asked for. The new rates will mean a monthly bill increase of 71 cents, or 0.78%, for a typical electric customer consuming 500 kilowatt-hours of electricity per month.
The MPSC also rejected DTE’s proposal to reduce the payments it makes to solar customers.
In the 606-page order, the MPSC laid out many reasons for only approving a fraction of DTE’s requests. Chief among them, according to their press release, was that residential customer bills provide the company with sufficient money to run their business, invest in clean energy, and upgrade the electric grid. The commission noted that residential electric sales surged in 2020 and 2021.
DTE responded to a request for comment with the following statement: “DTE’s efforts remain focused on improving reliability and maintaining affordability for our customers. We are reviewing the order and its implications on our future investments in Michigan and look forward to continuing our work with the MPSC.”
The decision came after a season that saw widespread outages during August thunderstorms, where more than 900,000 customers lost power, some for up to a week.
“DTE has been asking its customers to pay more and more for deteriorating and outage-prone electric service,” Amy Bandyk, executive director of the Citizens Utility Board of Michigan, said in a statement. “The MPSC agreed with CUB, the attorney general, and others that, in many instances, DTE failed to do its homework and prove that its spending requests were in the best interests of ratepayers.”
The case saw an unprecedented amount of public engagement. For the first time in recent memory, the MPSC held a public hearing in the case in response to public outcry. More than 200 people attended the August hearing, the vast majority calling on the MPSC to reject the increase.
“As far as anyone at the MPSC remembers, the commission hasn’t held public hearings on rate cases in the past,” MPSC spokesperson Matt Helms told Planet Detroit.
Independent consultant and activist Jackson Koeppel credited that engagement with producing the case’s outcome.
“This is a good indication that the commissioners are stepping up to be consistent and holding utilities accountable,” Koeppel told Planet Detroit. He added that even the approved increase is too much: “The number should have been zero.”
The case marks the lowest amount approved in a DTE Energy electric rate case in at least the past decade. The MPSC typically approves a portion of proposed rate increases and has demonstrated a willingness to reduce them substantially in recent years.
Win for solar owners
The commission rejected DTE’s proposal to reduce the return it pays to distributed generation providers, such as rooftop solar owners, and its proposal to place a demand charge on those customers.
Under a law passed by the Michigan Legislature in 2008, investor-owned utilities must connect distributed generation resources such as solar panels to the grid up to 1% of the utility’s average in-state peak load — the maximum electric load carried by the system during times of high demand — for the past five years.
In its order, the commission adopted MPSC staff’s proposal, which increases the payment to solar owners by about two cents per kilowatt-hour, according to John Richter, a senior policy analyst with the Great Lakes Renewable Energy Association and an intervener in the case.
“In this rate case, DTE tried to make solar energy uneconomical for homeowners and businesses. DTE knows they can’t compete with solar and don’t want to lose sales, so it is trying to eliminate the solar market in Michigan by raising fees and reducing the price they pay for solar energy,” Richter said. “The commission wisely rejected this choice of either crushing the economics of rooftop solar or allowing the cap on participation to close the opportunity for homeowners and businesses to supply their own energy needs.”
The order pushed DTE one step closer to embracing community solar by directing the utility to supplement its voluntary green pricing application before the commission with a straw proposal — an initial proposal that would be vetted before it becomes a final proposal — for a community solar project within 90 days.
The action would “serve as a starting point for the parties’ discussion and litigation in the voluntary green pricing proceeding,” according to the order.
Michigan League of Conservation Voters president Keith Cooley lauded the order.
“Everyone, low-income or not, can benefit from better access to renewable solar. DTE has been slow to accept community solar projects. In this order, the Michigan Public Service Commission told DTE to issue a proposal for community solar. That’s a move in the right direction.”
Editor’s note: This is an abridged version of the full article from Planet Detroit, which includes more details about the rate case.