LANSING – Consumers Energy filed its first rate case since 1995, seeking a $320 million annual increase in its revenue ? an average of 9.5 cents more per kilowatt hour.
The rate increase would cover a variety of costs the utility faces, including rising health insurance for its employees and equipment to comply with the federal Clean Air Act, said spokesperson Jeff Hollyfield.
If the full increase is approved, Consumers’ residential rates would average 9.5 cents per kilowatt hour, slightly above the 9 cents average charge among the nation’s largest utilities. Hollyfield said the rate would be 10.2 cents if it had been allowed to increase by the rate of inflation.
But it would just about wipe out in the first year the $250 million Consumers estimates customers have saved because of the 5 percent rate cut mandated by the state’s electric restructuring act.
As with Detroit Edison’s rate case completed last month, any rate increase for Consumers would not affect residential customers until January 2006 when the rate cap on that customer class is lifted. The new rates, if approved, would affect all business customers immediately because the last rate cap for those classes is lifted January 1, well before the case is likely to be decided.
Unlike Edison’s case, the Consumers case is not seeking resolution of any competition issues. He said Consumers already has a stranded cost case working its way through the approval process. Edison had wrapped stranded costs and power supply cost recovery in with the rate case, and the PSC had used that case to address funding for the Low-Income and Energy Efficiency Fund as well as rules for customers returning to regulated service after having left to for a competitive power provider.
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