(WXYZ) — The Michigan Public Service Commission approved a rate increase for DTE Electric Company customers Friday to fund infrastructure investments designed to boost reliability and speed up the deployment of clean energy generation.
The $368 million rate increase is an overall reduction from the $622 million the company initially requested in February.
The new rates take effect on Dec. 15.
According to the MPSC,a typical residential customer who uses 500 kilowatt hours of electricity per month will see an increase of $6.51, which is 6.38% on their monthly bill.
In response, DTE Energy said that while the MPSC number is accurate, it does not take into account $300 million in cost savings they announced in November was going to be passed along to consumers. DTE says when taken together those cost savings and the rate increase would mean a net impact to customers of under $3 a month.
"An electric bill is really made up of two parts, what I'll call a base rate and then a fuel charge," DTE Energy Vice Chairman and Group President Trevor Lauer explained. "We are lowering our fuel charge... effective today by $300 million."
Customers like Yolanda Bradford say another rate hike is too generous for the company.
"I don’t feel that it’s justified," she said. "We had another power outage and the next year and then just this August, we had two power outages back to back.”
Lauer says it's for that exact reason the rate hike will help, as they look to upgrade their systems with the funds.
"I guarantee you our team is working every day to reduce power outages for every customer. And when you do have a power outage, we want it to be a shorter power outages than you may have had before," he said.
The rate hike was among a number of measures pertaining to DTE Electric that were passed by the MPSC. Other measures include approving financing measures including an investment recovery mechanism. The approval included a time limit, so that it can be adjusted to include the findings of a distribution system audit that is currently underway.
A final report on that audit is expected by late summer 2024.
The commission also approved an additional $2 million in funding for DTE Electric’s pilot project to provide $1,500 rebates for income-eligible households for the purchase of electric vehicles costing $50,000 or less, as well as the company's request to accelerate the utility’s ongoing tree trimming surge to clear trees and branches from around power lines.
In addition, the commission also directed DTE to work with them to study tree trimming on residential service drops — the electric lines between power poles and homes — and directed the company to develop a proposal for residential service-drop tree trimming pilot in its next general rate case.
