LANSING – The Michigan Public Service Commission this week approved a $100 million increase in the electric rates for Consumers Energy, increasing a residential customer using 500 kilowatt hours of electricity by $9.17 more per month, an 11.93 percent increase.

Consumers had sought an increase in its electric rates of approximately $254 million, which would have a total impact to customers of $289 million because of the company’s proposed expiration of the Tax Cuts and Jobs Act (TCJA) Calculation C concurrent with the inclusion of those amounts in the requested rates.

Consumers said it was asking for the rate increase to fund replacement and modernization of its electric distribution system infrastructure as well as the utility’s work to meet its clean energy goals by eliminating coal-fired electricity generation and reducing carbon emissions.  

The company also asked to increase its authorized return on common equity to 10.5 percent percent from 10 percent, with a 52.5 percent equity ratio. Instead, the order today authorized a return on equity of 9.9 percent, with the company’s equity ratio set at 51.11 percent, consistent with previous Commission guidance. 

The increase of $100 million over rates approved in a settlement agreement in Case No. U-20134 in 2019 represents approximately 39 percent of Consumers’ initial rate increase request for the 12 months ending Dec. 31, 2021. 

The order provides further guidance for the Company’s 5-year Distribution Plan filing in the summer of 2021 to refine forecasting methods using advanced metering data and consider performance-based metrics associated with investments. The order also outlines the Commission’s vision for examining costs and benefits of distributed energy resources (DERs), particularly looking at how customers with DERs use the grid now and into the future, starting with a comprehensive study to be conducted in 2021 in line with Senate Resolution 142 of 2020.