DTE electricity rate hike approved - What it means for customers

DTE received approval to raise rates again, but the company says customers won't see their electricity bills go up - despite the commission that approved the hike saying that they will. 

On Thursday, the Michigan Public Service Commission (MPSC) approved a $217.4 million rate increase, down from the $456 million the company had requested.

The backstory:

The new rates will take effect Feb. 6. The MPSC said in a press release a typical residential customer using 500 kWh a month will see an increase of $4.61, or 4.65%, in their monthly bill.

However, in a statement, DTE said customers wouldn't actually experience this large of a rate increase.

Our customers demand and deserve reliable energy. DTE Energy is continuously improving our operations and driving down costs to keep energy affordable," a company spokesperson said. "Combined with DTE’s recent customer monthly bill reduction in the power supply cost recovery factor (PSCR), today’s order from the Michigan Public Service Commission means residential electric customers will not experience an increase in their monthly bills."

The PSCR the statement is referring to was implemented in November 2024, and reduced customers' electricity bills by about $5 a month. According to a previous press release from the company, DTE implemented the rate decrease as a result of the company saving $300 million in fuel costs. 

That reduced rate is expected to last through 2025. 

The $5 savings will offset the $4.61 rate increase that the MPSC said the approved hike would lead to. 

Big picture view:

DTE last received approval to raise rates in December 2023, when the MPSC allowed a $368 million increase.

Here are investments the MPSC said the rate increase will help fund:

  • Continued upgrades to DTE Electric’s 4.8 kilovolt (kV) system, serving Detroit, suburbs including Royal Oak and Birmingham, as well as Ann Arbor and large parts of the Thumb. DTE Electric’s 4.8 kV hardening program involves projects to improve safety and reliability and reduce the number of downed wires that remain energized, endangering the public. Improvements include using more durable materials to replace poles, crossarms, and insulators. In 2024 and 2025, 90% of the utility’s projected investment on 4.8kV hardening will be spent in low-income and otherwise vulnerable communities. The Commission also directed DTE Electric to present a comprehensive plan for removal of all remaining arc wire on its system.
  • An additional $87 million toward DTE Electric’s ongoing tree-trimming surge program, to increase the frequency of tree trimming and other vegetation management around power lines. Fallen trees, limbs and branches account for about two-thirds of DTE Electric’s power outages, according to the company. DTE Electric’s approved surge funding from 2019-2025 was $409.5 million, rising to $496.5 million with the additional funding.
  • The Commission authorized DTE Electric to extend its Infrastructure Recovery Mechanism (IRM) through Dec. 31, 2026, with spending capped at levels currently approved for 2025 and for the programs approved for 2025. The Commission said it was disinclined to authorize the substantial increases in IRM spending requested without a demonstration that the company has considered and incorporated the findings and recommendations of the MPSC’s recent third-party independent distribution system audit when reasonable and appropriate.
  • Costs for DTE Electric’s breaker replacement program. Breakers help recognize and isolate grid interruptions, allowing power to flow to as many customers as possible while minimizing equipment damage and reducing substation outage risks, ultimately lowering repair expenses and reducing the duration of outages experienced by customers.
  • DTE Electric’s projections relating to its pole and pole top maintenance and modernization program, which aims to inspect and maintain overhead distribution equipment in support of improving the system reliability and resilience to weather, storms, and tree-related events.
  • Costs relating to areas in and near downtown Detroit, including Highland Park, that face challenges with poor reliability because of aged equipment, lack of space for new equipment, and high failure rates. DTE Electric’s upgrades include expanding substations, creating new substations and retiring old ones, and decommissioning old underground cables and rebuilding miles of cable that face safety and reliability challenges.
  • 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 as more drivers opt for EVs, 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 Source: Information in this story is from the Michigan Public Service Commission and DTE Electric Co. 

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