Michigan Regulator Approves DTE Gas Rate Increase, Below Utility’s Request

The Michigan Public Service Commission on Sep. 10 approved a sharply reduced rate increase for DTE Gas Company, authorizing a net increase of $74.5 million instead of the utility’s requested $162.7 million. The decision supports continued investment in pipeline modernization and system maintenance while imposing stricter scrutiny on capital spending and expanding protections for lower-income customers. Residential customers using 75 hundred cubic feet of gas per month will see monthly bills rise by $2.87, while a separate infrastructure recovery surcharge will add 68 cents beginning Jan. 1, 2027. The regulator also approved a 9.8 percent return on equity, below the company’s request.

The commission paired the rate decision with several directives aimed at strengthening accountability. It rejected $284.1 million in proposed spending for the Taggart Compressor Station replacement, finding insufficient evidence to justify the investment or demonstrate that alternatives had been adequately considered. The agency also disallowed $17.9 million in fleet-related costs, ordered a vehicle idling study, and required DTE Gas to improve cost tracking and provide stronger justification for corporate expenses and future rate case filings.

Customer assistance became another major focus of the order. The regulator increased the Low-Income Assistance Credit from $40 to $58 per month and instructed the utility to improve communication about available support programs. It also directed DTE Gas to examine concerns over racial disparities in service shutoffs and submit findings by Dec. 30, 2026.

The agency approved an annual infrastructure recovery mechanism amount of $340 million for the 2027-2028 period while rejecting the company’s attempt to add new corrosion protection and regulator station replacement programs to that cost recovery mechanism. Those expenses must instead be pursued through future base rate proceedings. The regulator also ordered DTE Gas to update its long-term gas delivery planning, including cost-benefit analysis for ultrasonic meter deployment and improved weather normalization methods.

Separately, the commission increased Michigan’s automatic power outage credit to $44 per day for eligible electric customers and approved DTE Electric’s two-year residential battery virtual power plant pilot in Ann Arbor, allowing up to 100 participants to receive incentives for making home battery capacity available during periods of peak electricity demand.