Consumers Energy Company to Raise Gas Rates by Six Percent for Michigan Customers

The Michigan Public Service Commission has approved a settlement allowing Consumers Energy Co. to increase rates applicable to its natural gas service by $170 million. In an initial request, the company had asked for an increase of $278 million, which was later abridged to $233 million. However, the amount agreed to in the settlement is 39 percent less than the original request. The commission approved a rate of return on common equity of 9.9 percent and equity ratio of 50.75 percent.

The fresh rates will be applied with effect Oct. 1, 2022, raising rates for a typical residential consumer using 100 cubic feet of gas by $6.98 in their monthly bills. This is a raise of 5.98 percent as compared to current natural gas prices. However, the company agreed to fix its residential customer charges to $13.60 per month.

Consumers Energy is currently working on a $2 billion project called Enhanced Infrastructure Replacement Program, or EIRP, to replace 2600 miles of natural gas pipeline and it will increase its spending on this project to $250 million for 12 months ending in September 2022. In the settlement, Consumers also agreed to review and address the length of its EIRP project in relevance to the upcoming natural gas delivery plan. Also, the Consumers will not continue with the second phase of its natural gas demand response pilot program.

In January 2019, there was a fire event at Consumers Energy’s compressor station in Macomb Country Ray Township which declared a state of energy emergency in the town where the customers were asked to lower their gas consumption in extreme winters and a huge cost was incurred to handle that situation. However, the company agreed to waive off the capital expenditures which are related to maintenance and alterations not covered by insurance from that fire event, but at the same time seek recovery of fire related ray expenses in future if they prevail in their appeal of the commission’s order in Case No. U-20209. That order denied the company’s request for the reimbursement of the cost the company had spent after the fire from ratepayers. In the current settlement, the balance of utility Tax Cuts and Job Act of 2017 will be adjusted in order to decrease the gas obligation by $4,174,259.