LANSING – Michigan Attorney General Dana Nessel and other intervening parties have reached a settlement, approved today by the Michigan Public Service Commission (MPSC), to reduce Consumers Energy’s latest natural gas rate hike by nearly 75%. Consumers Energy initially requested to increase revenues from their ratepayers by $136 million. The settlement allows for only $35 million in additional revenue, keeping more than $100 million in the pockets of Consumers' ratepayers. Additionally, a bill credit will be applied to Consumers Energy natural gas customers' bills over a three-year period due to the sale of the company’s home service plan program.
“Michigan consumers deserve reliable utility services at fair prices,” Nessel said. “That's why my department scrutinizes every proposed rate hike by utilities. Today's decision by the Commission to approve the settlement reducing Consumers Energy's proposed increase ensures money stays in the pockets of their customers instead of needlessly increasing the company’s bottom line. We will continue to advocate for affordable and dependable service for residents across our state.”
Consumers Energy’s request to increase revenues by $136 million, a 5.7% increase in natural gas rates for the company’s customers, was initiated in December 2023. The Attorney General filed testimony suggesting that considering current rates, Consumers Energy should only receive a rate increase of approximately $5.3 million. She also opposed the company’s proposed $5.00 increase to monthly service charges for residential customers and its proposed $3 increase for small commercial customers.
In response to issues raised in testimony from the Attorney General and other parties, Consumers Energy reduced its own requested rate increase to approximately $113 million.
As part of the case, Consumers also sought approval to split proceeds from selling its home services product business 50-50 with its customers. The Attorney General opposed this proposal, advocating that 100% of the proceeds should return to ratepayers since before the sale of the program, all net revenues benefited them.
The settlement agreement provides for an increase in base rates of only $35 million, or just over one-fourth of what was originally requested. As part of this agreement, Consumers Energy agreed to reduce the proposed increase in monthly service charges for residential customers to $1.40 (to $15) and for small commercial customers to $2.00 (to $18).
Additionally, benefits from selling the home service plan business will be returned to ratepayers with a 25%-75% split; Consumers will retain 25% while returning 75% over three years starting October 2024 through a bill credit. Furthermore, all ongoing proceeds from a long-term service agreement that Consumers entered with the buyer will be credited entirely to ratepayers.
The settlement results in an average rate increase of 1.5% for residential ratepayers before applying the home service program bill credit. After applying this credit, there will be a net increase of just 0.1% for fiscal year beginning October 2024.
This settlement continues Attorney General Nessel's efforts to secure significant rate relief for utility customers.
So far this year, Nessel has saved Michigan consumers over $3 billion by intervening in utility cases before MPSC.
Consumers Energy provides electricity services to approximately 1.9 million customers throughout Michigan and natural gas services to 1.8 million customers across the state.
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