Michigan PSC approves new electric rates in support of DTE’s modernization efforts
After 10 months of regulatory review, a $188.3 electric rate hike at DTE Electric Co. has been approved by the Michigan Public Service Commission (MPSC), amounting to a $4 monthly increase for average bills as of May 15.
DTE asked for the rate increase as a means of paying for a variety of investments, including reliability upgrades, job efforts, carbon emission reduction, and upgrades to the Ludington Pumped Storage Power Plant. DTE said the updates have, even before the rate hike, helped improve electric reliability by 30 percent. To its customers, DTE noted that its rates remain below the national average.
Initially, the utility had requested $351 million for its base rate increase. The Commission cut that by 47 percent to get the new figure.
“The Commission does not take lightly its decision to authorize DTE to raise its rates, but we are bound by law to issue a decision now,” MPSC Chairman Sally Talberg said. “There are pressing needs to upgrade aging infrastructure to ensure safe, reliable electric service.”
While the rate hike comes amidst a time of increased uncertainty and hardship for customers during a pandemic, DTE has sought to offset this by simultaneously pledging to extend service protections through June 1. It also intends to shuffle between $30 million to $40 million in bill relief to its customers during June and July.
Some of the reliability efforts the funding will assist include the company’s tree trimming program, the replacement of aging equipment, and general modernization of the grid. As to jobs, DTE says the hike will support various new infrastructure projects throughout Michigan, which will, in turn, boost career opportunities. It expects to cut emissions by a further 50 percent by 2030 and 80 percent by 2040, so the money will also help the utility to transform its resources in use as it retires three coal power plants in two years.
As to Ludington Pumped Storage Power Plant, specifically addressed by DTE, funds will provide for plant upgrades making it capable of powering an additional 250,000 customers. Co-owned with Consumers Energy, the plant is already the second-largest pumped storage facility in the U.S., providing power through hydroelectric sources.
