DTE requests first rate increase in four years

Michael Martinez
The Detroit News

For the first time in four years, DTE customers could soon be paying more for electricity.

The Detroit-based utility on Friday sent a request to the Michigan Public Service Commission to increase its residential rates 3.2 percent — an average of $9.75 more per monthly bill — to help recover purchases and reliability upgrades.

While residential rates would go up, commercial and industrial customers will actually see rate reductions because of already-planned rate adjustments, DTE said. For years, commercial customers have subsidized residential rates, DTE said, but for the past couple of years the utility has been lowering business rates.

MPSC's three-person panel has a year to rule on the request, but DTE in June could implement a temporary increase, meaning bills could get more expensive in about six months.

Residential customers now pay 15.8 cents per kilowatt-hour. DTE wants to raise that to 16.3 cents per kilowatt-hour by next December, according to DTE spokesman Scott Simons.

"DTE has been an industry leader in controlling operating costs over the last 10 years," Jerry Norcia, president and chief operating officer of DTE Electric, said in a statement. "However, because of the significant investments we're making to ensure that Michigan has adequate and reliable electric supply in the long term, we have requested a rate increase at this time."

DTE said the rate increase will let them recover approximately $3.5 billion in infrastructure and other investments made over the past four years. DTE Electric serves about 2.1 million customers in southeastern Michigan.

James Clift, policy director of the Michigan Environmental Council, said, "We'd like to see better oversight by the MPSC to keep these rates affordable."

MPSC spokeswoman Judy Palnau said Friday's filing "begins a fairly long process that will run its course, and the commissioners will determine whether or not to grant the utility's request."

The request will go before an administrative law judge and will involve a number of parties, including the Attorney General's Office and a third-party group like the environmental council or other business representative.

Once the judge issues a proposal, the MPSC commissioners decide how much — if at all — to increase rates. They could set a rate lower than DTE's requested 3.2 percent increase. If they do — and DTE implements a self-imposed June increase — the utility would offer refunds.

DTE's last rate increase came in 2010, when DTE requested an additional $444 million and the MPSC allowed $188 million, Simons said. This year's increase request is for $370 million.