DTE Energy Co. customers will pay a higher electric rate starting next month as the Michigan Public Service Commission on Thursday approved the utility’s second hike in a little more than a year. The higher rate is expected to yield the utility an annual revenue increase of $217.4 million.
Starting Feb. 6, a typical residential DTE customer using 500 kWh a month will see an increase of $4.61, or 4.65%, in their monthly bill under the rate hike. The MPSC cut the Detroit-based utility’s original increase request by 52%.
The commission said that the revenue increase would allow DTE to upgrade aging power lines and improve reliability through increased maintenance and more frequent tree trimming, with a focus on Detroit and its nearest suburbs that have some of the oldest power lines on the utility’s grid.
Before a unanimous approval of the hike at the commission’s meeting on Thursday, commission member Katherine Peretick said although DTE, in its application seeking the increased rates, justified its tree trimming, pole top maintenance and other programs, it fell short of the commission’s expectations to show customer benefit of pilot programs that the higher rates would help fund.
“There are many places in this order where the justification was just not sufficient for us to be comfortable approving the spending,” she said.
Commission member Alessandra Carreon noted DTE needed to provide more detailed information about the programs that it says will help it continue to make strides in terms of reliability.
“We recognize the progress DTE has made in prioritizing infrastructure upgrades in vulnerable communities … however, DTE must go further by integrating demographic and reliability data into its distribution planning process,” she said.
But the commission chair, Dan Scripps, said the additional funding would ensure DTE makes strides in reducing the number and duration of outages, an issue the MPSC has been “obsessed” with, he said.
“The $217 million approved in additional revenue in this case, I think, brings us several important steps closer to where we need to be,” he said.
In response to the approval of the rate hike, DTE released a statement Thursday, saying: “Our customers demand and deserve reliable energy. DTE Energy is continuously improving our operations and driving down costs to keep energy affordable.”
DTE argued the hike will be mitigated because of its “recent customer monthly bill reduction in the power supply cost recovery factor (PSCR),” believing that “customers will not experience an increase in their monthly bills.”
DTE spokesperson Ryan Lowry explained that move, which took effect in November, reduced DTE’s PSCR by $300 million, which reduced residential bills by about $5 per month, on average, through the end of 2025.
The PSCR, a variable rate that reflects the actual cost of the fuel and other sources DTE uses to produce electricity, might later rise or fall depending on market prices, but for the rest of 2025, the utility expects it will continue to offset the rate increase approved Thursday, Lowry told The Detroit News.
The parts of DTE’s request that the MPSC approved include:
- An increase of $87 million, from $409.5 million to $496.5. million for 2019-25, to trim trees and other vegetation around power lines more often.
- Costs for DTE Electric’s breaker replacement program.
- Costs relating to expanding and adding substations and rebuilding miles of cable.
- Increasing DTE Electric’s low-income utility bill assistance credit from $40 to $50 a month, for enrolled customers whose household income is at or below 150% of the federal poverty level.
- Electric vehicle investments to support charging infrastructure, including $12.5 million in capital expenses for DTE Electric’s Charging Forward program in 2024 and $5.1 million in 2025.
- Costs for the utility’s portable generator program, which provides generators to the most vulnerable customers during widespread outages, helping power refrigerators and freezers, preventing the loss of food and medicine, powering critical-care medical devices, and more.
The commission held steady DTE’s authorized rate of return on common equity of 9.9%, rejecting the company’s proposal to increase it to 10.5%.
The MPSC also declined DTE’s request to recover through customer rates the costs of customer power outage credits caused by weather, vehicle crashes or contact with animals and refused to authorize $258,000 in corporate jet travel the company sought to recover from customers, saying the company did not demonstrate how the expense benefitted ratepayers.
DTE has been sharply criticized by customers, consumer advocates and some state officials for lengthy and extensive power outages following winter and summer storms, and Amy Bandyk, executive director for the Citizens Utility Board of Michigan, said in an email that the MSPC “did not go nearly far enough to send DTE the message that it needs to change its ways.”
“It’s not a matter of having enough money to improve the grid — it’s a matter of what DTE does with it,” Bandyk said. “The commission, however, approved most of DTE’s proposed plans for distribution system ‘hardening’ despite the utility’s failures to show that these steps are wise investments for the customer.”
The Michigan Attorney General’s office said in an October filing to the MPSC that the increase should be capped at $139.5 million, citing calculations based on expert testimony to the company’s revenue deficiency for the year.
“DTE needs to rein in its requests and be held accountable for continued service and reliability shortcomings — not rewarded for subpar performance by simply dumping more money into the machine,” according to the document filed by Joel King, assistant attorney general. “DTE’s customers and the entire state of Michigan deserve better.”
Those comments came 11 months after the commission granted DTE a $368 million electric rate increase for electricity users, costing the average residential customer about $6.51 more per month.
In September, state regulators released a third-party audit that concluded DTE and Consumers Energy, Michigan’s two largest utilities, had “worse than average” interruptions and restoration delays than other utilities, and tree-trimming cycles for both DTE Electric and were more delayed than their colleagues’.
The audit by Liberty Consulting Group found that both Consumer and DTE’s customer average interruption duration index in 2022 and 2023 — the average time it takes to restore service — was worse than average among other utilities, ranking in the fourth quartile for reliability.
It also noted in those same years that the number of Consumers and DTE customers who experienced four or more outages, as well as the customers who experienced outages of 8 hours or more, was “greater than usually acceptable for utilities,” again ranking the fourth quartile compared to other utilities.
Scripps said at the time the audit provided “a roadmap to achieving a grid that meets customer expectations.”
mreinhart@detrointnews.com
@max_detroitnews
mjohnson@detroitnews.com
@_myeshajohnson
Staff Writers Beth LeBlanc and Breana Noble contributed.
The rate hike comes as DTE seeks to recover costs for infrastructure upgrades and investments in renewable energy sources. While the exact amount of the increase will vary depending on usage, customers can expect to see an overall uptick in their electric bills.
This news may come as a disappointment to many customers who are already struggling to make ends meet. However, DTE has stated that the rate hike is necessary to ensure the reliability and sustainability of their electric grid.
As customers brace themselves for higher bills, it’s important to explore ways to reduce energy consumption and lower costs. Simple steps like turning off lights when not in use, using energy-efficient appliances, and sealing drafts around doors and windows can all help to save on energy expenses.
Keep an eye on your upcoming bills to see how the rate hike will impact your budget, and consider reaching out to DTE for assistance or payment plan options if needed. Stay informed and proactive to navigate these changes in the energy landscape.
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