LANSING – The Michigan Public Service Commission approved a $153.8 million increase in revenue for Consumers Energy Co.. Starting April 4, a typical residential customer using 500 kWh a month will see an increase of $2.78, or 2.79%, on their monthly bill.
The rate hike allows Consumers to pay for investments aimed at reducing power outages and making the utility’s electric grid more reliable and resilient.
The order represents a more than 52% reduction from the amount Consumers had sought: a combined $325 million, with $303 million through rates and $22 million in a separate 12-month surcharge for distribution deferral.
Rates are approved to take effect April 4. A typical residential customer using 500 kWh a month will see an increase of $2.78, or 2.79%, on their monthly bill.
The Commission approved a number of investments meant to improve reliability of the electric grid and reduce customer outages:
- Fully funding the $125,086,000 proposed by the company for tree trimming while also directing Consumers to better consider the benefits of accelerating vegetation management efforts to a four-year fixed tree trimming cycle, something the company’s own analysis found was the optimal cycle length.
- Low-voltage distribution (LVD) investments specifically targeted at reducing the number of customers who experience frequent outages. In 2023, 10.7% of Consumers customers experienced four or more outages per year. The LVD investments are aimed at reducing that number to 6% of customers, consistent with the MPSC’s Service Quality Rules.
- High-voltage distribution investments designed to improve grid reliability through capacity upgrades, new tools and technology.
- $86,347,000 for year two of restricted, proactive recovery of strategic distribution investments for LVD line reliability, resilience, and system protection via an investment recovery mechanism.
- System modernization that will allow Consumers to more quickly learn where faults are on the grid and automatically reroute power, helping to isolate the impact of disruptions and minimize customer outages.
The Commission also accepted Consumers’ Environmental Justice Resiliency Plan and directed the company to include a regression analysis in future electric rate cases and distribution planning cases.
The order adopts enhancements to Consumers’ transportation electrification program for electric vehicles (EVs). Among the enhancements are utilization of the North American Charging Standard and expansion of EV-charging rebate options for income-qualified residential customers.
The Commission also directed Consumers Energy to explore, along with other regulated electric and natural gas utilities, changes to summertime extreme weather policies, such as prohibitions on shutoffs during periods of extreme heat. Potential changes will be explored comprehensively in future activity in Case No. U-20140.
The Commission authorized a return on common equity of 9.9% and a capital structure of 50% equity and 50% debt. The utility had sought a return on common equity of 10.25% and a capital structure of 49.25% debt to 50.75% equity.
