LANSING, Mich. - The Michigan Public Service Commission approved an $84 million rate increase for customers that receive gas supplies from DTE.
The new rate, which takes effect at the beginning of 2022, will add about 3.69% - or about $3.18 - to an average residential customer's monthly gas bill.
DTE originally asked for a $195 million increase for its gas customers, which included a $38 million surcharge for infrastructure. The commission's rate approval was about 57% lower than what DTE was after, a release said.
The move affects approximately 1.2 million customers in Southeast Michigan.
The utility's president said that despite the increase, DTE's strategies "will save customers more than six times that amount this winter, compared to the pricing of companies that didn't lock in lower prices early." The company said the savings are due to DTE storing natural gas earlier in the year before prices for energy increased.
"We know that continuing to modernize our natural gas infrastructure is critical to the delivery of safe and reliable natural gas. In addition, the high-density pipes we’re installing across our service territory are much more effective in reducing greenhouse gas emissions," President Joi Harris said in a statement.
Michigan Attorney General Dana Nessel championed the commission's decision, arguing her testimony during the rate case reported a $19 million revenue deficiency, her office said.
"Although it still represents a significant rise in customer rates, it keeps that increase to less than 4% while still providing DTE Gas with added revenue to continue to improve its infrastructure and customer experience," said Nessel.
According to the commission, other factors that lead to a reduction in the rate increase request included:
- Concerns about DTE Gas not meeting its target level performance for its financial incentive compensation program. The company will implement a tracking mechanism so the commission can monitor the company's progress in meeting its incentive requirements
- Uncertain costs affiliated with the 22-mile natural gas pipeline in northern Michigan and the company's Van Born Project meant to increase reliability for customers in Southeast Michigan.
- The commission's approving of a lower inflation rate than what was south by the company
- A rejection of costs related to the repair and replacement of a distribution main under the Detroit River that impacted customers on Belle Isle.
In future rate cases, DTE Gas will need to file additional information related to benefits to customers linked to merchant fees and an alternative method for estimating costs of transporting gas.