State utility regulators approve electricity rate hike for DTE Energy

Delta Township — The Michigan Public Service Commission on Friday approved a $368 million electric rate increase for DTE Energy customers for the coming year, about 60% of what the Detroit-based utility initially requested in February.

The increase will cost the average residential customer about $6.51 more per month on their electricity bill, state utility regulators said. The new rates will be effective Dec. 15 for DTE’s 2.3 million electricity customers in southeast Michigan and the Thumb area.

Electricity bills for the typical residential customer will go up about 6.4%, according to the Michigan Public Service Commission, a state panel that regulates utility giants DTE Energy and Consumers Energy.

Commissioner Katherine Peretick said DTE’s additional investment in its electricity distribution area is “necessary” to reduce future outages that have plagued Metro Detroit customers in recent years.

“The only way to improve is to fix the system,” Peretick said. “We’ll be watching closely to ensure these investments have the intended effect” of reducing the frequency and severity of outages.

DTE on Friday argued the increase was curbed by a decrease the company announced last month of about $300 million due to savings in the fuel and resources the company uses to produce energy. Balanced against the November decrease, Friday’s decision averages to an increase of about $3.15 per month for an average residential customer, the Detroit-based utility said.

DTE in February asked the commission to boost its total charges by $622 million annually, just a few months after the commission approved a nearly $31 million increase in response to a $388 million request.

The $31 million increase, DTE said, amounted to about a 71 cent increase per month for an average residential user.

The $622 million increase would have amounted to roughly $12.46 more per month for an average customer, an increase of about 14%. The company later adjusted it’s request to $583 million.

Attorney General Dana Nessel’s office has argued DTE’s request was nearly twice as much as it needed. The office estimated DTE’s revenue deficiency was at most $326.4 million.

DTE has petitioned successfully for several rate increases over the past decade and, earlier this year, the utility implemented “time of use” rates that increased rates during peak hours.

This is a developing story. Check detroitnews.com later for updates.

eleblanc@detroitnews.com