LANSING, MICH. – State officials agreed on an electric rate hike for customers of Consumers Energy but required the company to double its rooftop solar cap, among additional efforts toward electric vehicle charging, community solar, grid reliability, and electrifying residential heating.
The Michigan Public Service Commission (MPSC) on Jan. 19 approved a $155 million rate increase for electric customers of Consumers Energy, an amount 43% lower than the utility initially sought. That increase comes with a checklist of marching orders to improve reliability and heighten renewable energy efforts.
An average Consumers Energy residential customer who monthly uses 500 kilowatt hours of power can expect to see a net overall increase by 77 cents in their monthly bill. The new rates go into effect Jan. 20.
The company said in its filing with the MPSC that the requested rate increase was driven by continued infrastructure investment and the need to serve more customers. Investment expenses are associated with new solar and natural gas-fired power generation, system reliability and resiliency, safety and compliance, and enhanced technology, Consumers said in its case argument.
Brian Wheeler, company spokesperson, said Consumers Energy is committed to delivering safe, reliable, affordable, and increasingly clean energy to power Michigan homes and businesses while keeping bills as low as possible.
“From trimming more trees to employing the latest smart technology, we’re committed to achieving fewer and shorter power outages for our customers while preparing our system to support electric vehicles and the challenges of the 21st century,” he said.
The now-approved settlement agreement involved 17 parties and three more that did not object to the deal. Among those who opposed the initial rate increase request were Michigan Attorney General Dana Nessel and the nonprofit Citizens Utility Board (CUB) of Michigan.
“As a result of this settlement agreement, Consumers Energy must make important progress toward using ratepayer dollars more efficiently. That includes steps to prevent power outages before they happen,” said Amy Bandyk, CUB executive director.
“Michigan utility customers pay some of the highest rates in the country for some of the worst electric service in the country. Settlement agreements like this one can put us on a path to turning this situation around.”
CUB of Michigan conducts an annual analysis of the state’s utility performance and for 2022, found Michigan ranks terribly against other states in some reliability metrics – like average time to restore power after an outage – and only middling in others.
Among the details in the state-approved settlement, Consumers agreed to double the cap on its distributed rooftop solar and legacy net metering program from 2% to 4%. Additionally, the rate at which the company pays rooftop solar customers for the excess power fed onto the grid will be based on power supply rates that factor in transmission costs.
This settlement provision means the rooftop solar industry in Michigan can continue to grow and participants will be better compensated, said Laura Sherman, president of the Michigan Energy Innovation Business Council, a nonprofit renewable energy advocacy group that also intervened in the rate case.
“We’re getting really close to again hitting the 2% limit for those customers. And so, there’s a need to make sure those customers can continue to install rooftop solar when they want to, and if we hadn’t achieved this that might have been in question,” she said.
Other provisions in the agreement include: a straw proposal pitch for community solar in the green pricing program; a pilot study program on curbside EV charging that eventually becomes permanent; requiring rebated EV charging stations to meet federal operating standards; and Consumers must also target clearing trees and other growth from along electric powerlines at the worst performing load concentration points as part of its the next rate case.
As part of the settlement, the three-member MPSC panel also approved a plan for Consumers to provide a one-time, $15 million voluntary refund from 2022 revenues to go toward customer bills through a monthly credit.
“We understand many Michiganders are facing challenging times, and no one wants to see rising energy bills ― especially our most vulnerable customers. We are working to manage the increasing costs of energy supply as we continue to help customers manage their monthly bills and provide payment assistance programs to customers in need,” Wheeler said.
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