The Michigan Public Service Commission on Jan. 9 approved Consumers Energy Company’s settlement that provides for an annual revenue decrease of $24 million and terminates the “Credit A” federal tax cut reduction of $123 million, resulting in a net revenue increase of $99 million. The tax adjustment, the first of a three-step process to address the tax law impacts, was designed to reflect savings on customer bills until the commission approves new rates using the lower corporate tax rate. The rates go into effect Jan. 10 raising monthly electric bills by $1.62.
Last month, the commission authorized $70 million in the second round of refunds for Consumers Energy to reflect savings from the time the tax law took effect until the date when the Credit A was reflected in customer bills. The federal tax law slashed the corporate income tax rate to 21 percent from 35 percent effective Jan. 1, 2018. The third phase, to be announced next year, will quantify the impact on customer bills of long-term items that have not been considered in the prior steps.
The commission also authorized Consumers Energy to recover the costs of a $10 million electric vehicle program over five years. The three-year pilot, called PowerMIDrive, marks the state’s first EV infrastructure program aimed to promote the market through new rates, rebates, and customer education. The agency said that the cost recovery mechanism will serve as an incentive for the utility to support charger replacement across the state, avoid expensive future investments when EVs are expected to grow, and spread awareness about the benefits of off-peak charging.
Consumers Energy is a subsidiary of CMS Energy Corp.