The Michigan Public Service Commission (MPSC) has approved settlements in rate increase requests from the Michigan Gas Utilities Corporation (MGUC) and Upper Peninsula Power Company (UPPCO), as announced by Michigan Attorney General Dana Nessel. The settlements result in significant reductions in the requested rate hikes, partially due to the Attorney General's intervention.
In March, MGUC filed a request for a $17.5 million increase in natural gas rates, which would have raised residential customers’ rates by 12%. The company also sought a 10.25% return on equity, one of the highest in the state. Similarly, UPPCO filed a request for a $16.9 million increase in its electric rates that would have increased residential customers’ rates by 13.6%. UPPCO also sought a 10.7% return on equity, among the highest in the country.
Attorney General Nessel intervened in these cases along with several other ongoing rate increase applications before the MPSC from utility companies including Consumers Energy, DTE, Upper Michigan Energy Resources Corporation, Northern States Power, Alpena Power Company, and Indiana Michigan Power Company.
In MGUC’s case, Nessel worked with other intervenors to reduce the $17.5 million requested increase to $7 million – a 60% reduction – and reduced a 12% increase in residential natural gas rates to 0.7%, representing a 94% reduction. The settlement also reduced the return on equity from the requested 10.25% to 9.86%.
For UPPCO’s case, Nessel and other intervenors managed to reduce the $16.9 million requested increase to $9 million – nearly a 50% reduction overall. Additionally, they reduced a proposed 13.6% increase in residential electric rates to 5.7%, marking a 58% reduction and lowered the return on equity from the requested 10.7% to 9.86%. The settlement also requires UPPCO to donate $200,000 to low-income customers struggling with their electric bills.
“This has been a busy year with multiple utilities seeking rate increases at the same time,” said Nessel “but my office has been vigilant in aggressively reviewing and litigating these cases to protect customers around the state.” She added: “Our efforts have reduced proposed double-digit residential rate hikes by 94% for MGUC customers and by 58% for UPPCO customers.”
MGUC serves approximately 185,000 natural gas customers in southwestern Michigan’s lower peninsula while UPPCO serves about 53,000 customers across ten counties of Michigan's Upper Peninsula.
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