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The state approved a $184 million annual rate increase Tuesday for DTE Energy, slightly more than half the amount the utility was seeking.

The increase represents a 4 percent increase for customers. The rate hike takes effect Feb. 7.

Because the utility implemented a $245 million pricing plan — $5 more per average residential bill — for electric service in August in advance of the rate hike hearing, customers will receive a refund plus interest on their bills, according to the Michigan Public Service Commission.

Customers now should see a refund retroactive to August 2016.

“DTE Energy will work with the MPSC to calculate the credit and appropriately apply it later this year,” said Trevor F. Lauer, DTE Energy Electric president and COO said in a statement Tuesday. “Still, DTE Energy customer bills are equal to 2012 levels and below the national average.”

In February 2016, DTE Energy filed a request with the Public Service Commission to raise $344 million to improve aging infrastructure and equipment. In its application, the utility company said the revenue request was “necessary in order to allow the company to continue to provide safe and reliable electric service, to meet customers’ service quality expectations, and to allow the company a reasonable opportunity to recover its costs of operation, including a reasonable rate of return.”

“One of the primary reasons that customers experience power outages is the lack of maintenance and the age of electric distribution equipment such as substations, transformers and wires,” Sally Talberg, chairman of the MPSC said in a statement Tuesday. “To help improve electric reliability for all energy users, the Commission’s order approves new investments by DTE Electric to upgrade its distribution infrastructure.

The Public Service Commission asked DTE Electric on Tuesday to develop a comprehensive, five-year system improvement investment plan, said Judy Palnau, spokeswoman commission.

DTE Energy officials have said as a result of a number of initiatives, customers have experienced fewer outages. These initiatives include $1.8 billion of work in 2015 to maintain reliability of the utility’s power plants and reduce emissions, improve the reliability of the electric grid and build solar and wind generation.

Also in 2015, DTE Energy trimmed nearly 4,000 miles of trees along circuits.

cwilliams@detroitnews.com

(313) 222-2311

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