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DTE Energy Co. customers will see a small increase in their monthly gas bills beginning in October based on a newly approved rate hike.

The Michigan Public Service Commission on Thursday signed off on a rate increase of $8.9 million for DTE. 

The monthly increase for the average residential customer will be 95 cents, according to a news release from the state. The average residential customer uses 10,000 cubic feet of natural gas per month.

The funds are expected to go toward infrastructure investments and speeding the removal of gas meters and to boost its low-income assistance and self-sufficiency programs, the public service commission said.

The company had sought an increase of $85.1 million annually when it filed its request in November 2017. It later lowered its request to $38.1 million after adjusting for the impact of the Tax Cut and Jobs Act and other recalculations, officials said.

The Thursday increase granted by the commission is about 9 percent of DTE's original request, officials noted. 

“The approval of this order will allow us to accelerate our pace of upgrading gas mains across our system as part of our infrastructure modernization efforts," said Mark Stiers, president and chief operating officer of DTE Gas. "The benefits of federal tax law changes allowed us to keep the impact to the average customer’s bill minimal while enabling us to continue delivering reliable, safe and affordable energy to our customers across the state for years to come.”

DTE plans to invest $1.2 billion over the next five years into natural gas main replacement and other system improvements.

"Our original request to the MPSC was to accelerate to a 15-year pace (from 25), today’s rate order changes that pace to 18 years," according to the company.

The commission approved spending $135.6 million this year, $169.7 million in 2019, $193 million in 2020, and $191 million annually from 2021 through 2023 to replace the high-risk cast iron or bare steel underground gas lines.

Under the order, DTE is expected to replace up to 206 miles of natural gas distribution lines annually with a target to complete the program in 2035, officials said.

DTE will also relocate or remove another 3,000 inside meters by the end of the year. In 2019, they will relocate or remove 8,000 meters each year that lack access for required inspections.

The utility is expected to replace about 300,000 inside meters through 2023.

DTE was ordered to work with the public service commission's staff to on improved customer service and outreach effort and to file a report about its lack of meter inspections in the past.

The commission also approved a $1.4 million increase for the Residential Income Assistance and Low Income Assistance credits programs, which together provide financial help to about 88,000 customers, the commission said.

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