LANSING – Customers of Consumers Energy will pay $1.28 more monthly for their electricity service, effective December 1, under new rates approved Thursday by the Michigan Public Service Commission.
The PSC authorized Consumers Energy to increase its electric rates by $130 million annually, due in part to the company’s retirement of seven coal plants in Michigan.
Residential customers using 500 kilowatt-hours of electricity a month will see an increase of $1.28 on their monthly bill (Case U-17735).
“With a focus on reliability, affordability and environmental protection, today’s order lays a solid foundation from which customers will benefit,” PSC Chair John Quackenbush said in a statement. “Soon, the utility will close on the purchase of an existing natural gas plant and will retire seven coal units across the state. Significant investments will also be made to improve safe and reliable service and technology.”
Quackenbush noted, however, that the commission rejected $72.2 million and denied the request to implement an investment recovery mechanism that would have increased rates by another $242 million.
Specifically, Consumers Energy sought a rate increase of $199 million including the purchase of the Jackson natural gas plant, new depreciation rates and the retirement of the seven coal plants. The amount approved is 36.4 percent below what the utility requested, the PSC said.
Customers will see a credit on their bills until the utility purchases the Jackson plant, the PSC said, and that credit will cease when the purchase is complete. At that time, residential customers will see an additional $1.88 increase on their monthly bills.
That rate increase will be reduced to $1.25 for residential customers on April 15, 2016, when the company retires its “Classic Seven” coal plants, the commission said. Those plants are two units at the B.C. Cobb plant in Muskegon County; two at the J.C. Weadock plant in Bay County; and three units at the J.R. Whiting plant in Monroe County.
“We appreciate the Michigan Public Service Commission’s review of our electric rate case. The commission’s ruling allows Consumers Energy to complete our purchase of the Jackson gas plant, to help offset the retirement of seven older coal-fired generating units that will close in less than five months,” Brian Wheeler, spokesperson for Consumer Energy, said in a statement. “We will continue to upgrade our electric system, keep electric lines free from tree interference and add environmental improvements that will let us continue to provide electricity more reliably and cleanly to 1.8 million Michigan homes and businesses.”
Commissioner Sally Talberg concurred in part and dissented in part on the case.
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