(WXYZ) — The Michigan Public Service Commission has approved a settlement agreement that permits Consumers Energy to raise rates for their gas customers.
The settlement calls for Consumers to raise rates to collect $95 million for capital infrastructure improvements, investment in technology and operational efficiency, and increased financing costs. The amount is down from the $212 million Consumers had initially proposed.
The rate increase will take effect Oct. 1, 2023. A typical residential customer using 100 ccf of natural gas monthly will see an increase of $4.20 on their bill, a 4.2% increase.
Other terms of the agreement according to the MPSC include:
- The company is authorized to spend $214 million on its Enhanced Infrastructure Replacement Program on a minimum of 110.8 miles of installed main replacement through Sept. 30, 2024. The company agrees to work with MPSC Staff and other interested parties to provide information on the program’s costs in support of potentially reducing future unit costs.
- Consumers is authorized to implement a pension and other post-employment benefits (OPEB) volatility mechanism that will defer for future recovery or refund of pension expense above or below $29,547,000 and OPEB expense above or below $31,142,000 beginning Oct. 1, 2023.
- Monthly customer charges will be maintained for residential, A-1, and GS-1 service classes.
- The company will provide a cost-of-service study that shows allocation of Other Distribution Plant by Federal Energy Regulatory Commission account and calculates impact of using average and excess allocation and allocating between high pressure and non-high pressure.
- The company will conduct a workgroup to discuss their Group Transportation Service Pilot program, including good faith attempts to address reasonable concerns from gas suppliers.
Consumers’ most recent gas rate increase of $170 million was approved in July 2022.
The agreement comes as the MPSC also announced a settlement with Michigan Gas Utilities Corp. (MGU), which serves about 183,000 customers across the western and southern Lower Peninsula.
