Michigan’s largest utility wants to raise rates next year.
DTE Energy has filed a request with the Michigan Public Service Commission to gather another $370 million a year in revenues from its more than 2 million customers in southeast Michigan.
That money will go to recoup costs associated with environmental compliance; additional generation capacity; safety and reliability upgrades; and to keep up with inflation, according to the company’s MPSC filing.
The filing asks for a 15.5% base rate increase on residential customers, and a roughly 8% increase overall. But DTE spokesman Scott Simons says only residential customers will be affected, and households will see a much smaller increase in their bills—closer to 3%-- because the company is getting rid of some other fees and surcharges.
About $240 million gathered from the rate increase will go toward more environmental controls, including “all the equipment we’ve put on our coal-fired power plants to meet federal environmental regulations,” Simons says.
But environmental groups aren’t happy with DTE’s request, and say they plan to fight it.
Regina Strong, director of the Michigan Sierra Club’s Beyond Coal Campaign, says it’s troubling that Michigan continues to generate over half its electricity from coal.
“Many other states have figured out a way to have a broader mix, whereas DTE is still maintaining almost 75% of their power generation through coal,” Strong says.
“We are very concerned about the fact that they are continuing to use the same model, not investing in renewable energy, and continuing to impact our citizens in terms of health and air quality.”
“They want to spend $240 million on plants they’ve already admitted are really old, and some are out of compliance with sulfur dioxide emission limits,” adds Sierra Club staff attorney Laurie Williams.
Williams notes that the cost of renewable energy sources has dropped dramatically in the past two years, making them cost-competitive with fossil fuels in many cases.
“That [rate hike] money would be better-spent on renewables,” Williams says.
Strong and Williams say the Sierra Club and other environmental groups will take their case against the rate hike to the MPSC.
But DTE spokesman Scott Simons says that under Michigan law, the company can self-implement part or all of the rate increase—unless the MPSC makes a decision within six months.
“So by early summer, customers will probably see some movement on their bills,” Simons says.