Consumers Energy, Michigan's biggest natural gas company, will soon be implementing a hike on gas bills just as cold weather will be settling into the state for the winter.
The Michigan Public Service Commissions has approved an increase of 9.1% for customers, allowing Consumers Energy to raise $144 million over the next year.
Residents will see an increase of $6.72 per 100 cubic feet of gas used each month.
The approved increase is 60% of what the company had asked for in December - $245 million.
According to the MPSC, Consumers argued that the additional revenue is needed for natural gas system infrastructure replacement and rising costs for operations and maintenance, financing, and environmental response.
The money used will not go towards the Ray Compressor Station in Macomb County which caught fire in January 2019 and led to a natural gas emergency in Michigan. The costs for that incident can be addressed during Consumers Energy's next gas rate increase, after insurance proceeds are known and applied.
This is the second straight year Consumers Energy rates have increased. In October 2019, rates increased by $6.11 per 100 cubic feet.
Michigan public utilities cannot raise rates without state approval.
As part of the agreement with the state of Michigan, Consumers Energy agreed to take four other steps:
- Make a one-time $2 million contribution to the Heat and Warmth Fund, which provides assistance to households needing help to pay energy bills, and other non-affiliated non-profits, with the funds directed to serve Consumers Energy customers.
- Continue its increased spending of $100 million for 2020 and $150 million starting in 2021 on its Enhanced Infrastructure Replacement Program, which replaces aging pipe with newer materials. Consumers Energy will also file with the Commission annual planning and performance reports related to the replacement program.
- Hold a collaborative and work with stakeholders on the design of residential and commercial and industrial Demand Response pilot programs to be launched in late 2021.
- Accelerate the amortization schedule for its unprotected, non-property component of the Tax Cuts and Jobs Act deferred tax liability and pre-1993 deferred tax liability to occur between Oct. 1, 2021 and Sept. 30, 2022. This will be approximately $84.5 million.