Michigan Commission Approves About $114 Million Rate Hike for DTE Gas

The Michigan Public Service Commission on Nov. 8 approved a settlement allowing DTE Gas Co. to increase its rate by nearly $114 million, about 57 percent lower than the utility’s initial request. The company filed the rate request in January 2024, requesting to raise rates by $266 million to fund infrastructure projects to modernize its natural gas transmission and distribution system and higher operations and maintenance costs.

The commission also approved a rate of return on common equity of 9.8 percent, down from the previously approved 9.9 percent, and a capital structure of 50 percent equity and 50 percent debt. The commission approved DTE Gas’s last rate increase in December 2021, authorizing to an increase of $95 million.

With the approval, a typical residential customer consuming 100 ccf of natural gas will see a 2.28 percent increase in their monthly gas bill, or an additional $1.98. Customers will also pay an extra 66 cents for DTE’s approved Infrastructure Recovery Mechanism, or IRM, surcharge effective Nov. 21. Due to annual increases, this surcharge will result in an increase of $6.28, or 7.04 percent, by January 2029. The IRM is a method to recover the company’s predetermined capital expenditures for various long-term infrastructure projects including replacing aging pipelines and residential gas meters to improve the safety, reliability and integrity of the gas distribution system.

In the order approving the rate increase, the commission also approved a sales forecast proposed by DTE Gas for the period August 2021 to August 2023, as well as projected test year gas sales of 159.1 billion cubic feet. The order also authorized a $10 increase in DTE Gas’ monthly Low-Income Assistance credit to $40.

The order directs DTE Gas to submit an updated gas delivery plan by Dec. 31, 2025, outlining different energy transition pathways along with related risks and costs, and DTE’s approach to meeting emissions reduction targets, including timelines to meet these targets.

In a further set of orders, the commission approved measures to implement the state’s energy waste reduction, or EWR, program. The commission ordered its staff and Energy Optimization Collaborative to finalize the format of the Michigan Energy Measures Database. Additionally, the commission assigned docket numbers and filing deadlines for annual EWR reports and reconciliations for several state utilities.