MPSC grants mid-year move by utilities to spread out costs, lower electric bills

Consumers Energy Co. customers could soon see lower electric bills, thanks to a mid-year temporary order approved by the Michigan Public Service Commission (MPSC) this week that seeks to counteract the higher costs for natural gas the company currently uses to generate power.

The order allowed Consumers to include $149,692,109 of what had originally been a more than $449 million underrecovery request for the power supply cost recovery (PSCR) factor in 2023. The remaining will be recovered in equal amounts during the 2024 and 2025 plan years to spread out the impact as Consumers recovers costs from the higher natural gas prices brought by a mix of higher inflation, global energy woes, and the Russian invasion of Ukraine.

The MPSC noted that while it is best to try to match market prices to PSCR factors as closely as possible, sometimes events make that impossible – and the high prices and market volatility that marked 2022 made that the case.

PSCR factors represent utilities’ projected costs for fuel used to generate or buy electricity from markets in service of their customers. While they plan for these costs each year, actual costs are reconciled at year’s end, then any difference is rolled into the following year.

There were no objections to the settlement from intervenors in the case.