DTE seeking $266 million increase for natural gas rates; AG's office disagrees
Detroit-based DTE Gas Company, a subsidiary of DTE Energy, will seek a $266 million annual increase of its rates for natural gas services in 2024, although Attorney General Dana Nessel's Office filed an intervening brief Tuesday asking state regulators to not approve the full rate increase request without DTE explaining exactly why it needs to increase rates by hundreds of millions of dollars.
A residential customer who uses 100 cubic feet of natural gas per month would see a 9.9% increase, or an increase of $10.08, on their monthly bill if the full $266 million rate increase request was approved, according to DTE.
DTE provides natural gas service to 1.3 million people in Michigan. The company, in an application filed with the Michigan Public Service Commission on Monday, said it needs to increase rates to keep up with rising costs for infrastructure, operational and maintenance costs, market-driven increases to wages, and to keep compliant with state and federal regulations. Of the requested $266 million increase in revenue, the company says $106 million of that is already accounted for in existing surcharges on rates, meaning the net increase for customers would be $160 million annually.
The Michigan Public Service Commission (MPSC) is the body that considers rate increase requests from utility companies. In rate increase request cases, the commission typically ends up approving an increase that's lower than what's initially sought by a utility — for example, the MPSC approved a natural gas rate increase of $84.2 million in December 2021, when DTE had initially sought to increase rates by $195 million. That case, which was the last time DTE increased natural gas rates, resulted in about a 3.7% increase for the average DTE customer's monthly natural gas bill, according to the MPSC.
The commission is a three-member body, with all members appointed by the governor. Commissioners most recently approved a $368.1 million electricity rate increase for DTE Energy in December, after the company initially sought to increase electric rates by about $620 million.
In a statement provided to the Free Press, a DTE spokesperson said the rate increase request will determine how DTE can make investments in its natural gas infrastructure.
"DTE shares a mutual interest with the Michigan Public Service Commission in safely delivering energy to our natural gas customers, who reside in southeast, northern and mid-Michigan," the spokesperson said. "This filing is just the first step in a ten-month process to determine how much the company can continue investing to replace more than 4,000 miles of aging, cast-iron pipes; manage double-digit inflation on the costs it pays for pipes, meters and other materials; and deliver on our promise of safe service while keeping energy affordable for customers."
Nessel, in a notice of intervention brief filed with the MPSC on Tuesday, stated the commission should not approve any rate increase request without DTE submitting an evidentiary record outlining the need for increased rates.
“This is yet another in a continuing string of multi-hundred-million-dollar cases brought by the company," Nessel said in a statement. "My team and its experts will carefully examine DTE’s requested increases and strongly object to any that are unreasonable or are more aligned to shareholder benefits than ensuring ratepayers can keep their homes warm all winter. I remain concerned about the clear pattern of repeated rate increases that come before the Commission, one right after the last.”
Nessel's Office has commonly intervened in rate increase request cases brought forward by utility companies since she took office in 2019.
DTE wants to implement new natural gas rates by Nov. 5, 2024, according to its application. A pre-hearing in the rate case is set for Feb. 5 in front of an administrative law judge.
A Free Press investigation found both DTE and Jackson-based Consumers Energy enjoy a close relationship with the MPSC, including commissioners attending getaway conferences sponsored by utility trade groups, with the utilities' costs for those memberships charged back to ratepayers. The investigation also found the MPSC conducts nearly all of its deliberations in secret, and hasn't voted down a single order since at least 2010.
Free Press Lansing Bureau Chief Paul Egan contributed.
Contact Arpan Lobo: [email protected]. Follow him on X (Twitter) @arpanlobo.
This article originally appeared on Detroit Free Press: Nessel skeptical as DTE asks for $266 million natural gas rate boost
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