DTE monthly rates to jump by 6.4% on Dec. 15 to fund clean energy

• The Michigan Public Service Commission approved a residential rate increase of over $368 million for DTE
• Michigan says bills for a typical residential customer bill will rise $6.51 per month. DTE says the increase will be less than half that
• The commission approved a $30 million rate hike last November that also increased monthly bills

Michigan regulators on Friday approved a $368 million rate increase for DTE Energy that the state says will increase electricity rates for average residential customers by $6.51 per month, or nearly $80 a year.

That’s less than the $622 million rate increase originally sought in February by DTE, the Detroit-based company that serves 2.3 million customers.

The company has said it needs to increase rates to improve its grid and speed the transition to clean energy — and contends the rate hike will be offset by a $300 million savings in fuel and transportation costs, putting the average increase closer to $2.56 per month.

The three-member Public Service Commission unanimously approved the 6.4 percent rate increase after conferring behind closed doors. The increase goes into effect on Dec. 15.

Related:

• In settlement with critics, DTE Energy agrees to faster coal phase-out
• DTE wants to quit coal by 2035. Some in Michigan say that’s not fast enough
• DTE Energy cut operations to meet profits months before power outages

The vote came days after Gov. Gretchen Whitmer signed clean energy bills that mandated utility companies used 100 percent clean energy by 2040. 

The new law also requires utility companies to boost their energy-efficiency savings from 1 percent to 1.5 percent. DTE has said it plans $45 billion in upgrades over the next 10 years.

A spokesperson for Whitmer noted that DTE requested the rate increase months ago, noting that it is unrelated to clean energy legislation that does not take effect until February and will ultimately will lower rates.

But several Republicans seized on the increase to criticize the legislation, calling the clean energy mandate an expensive boondoggle.

“We tried to warn everyone this would happen, and it sure didn’t take long,” said House Republican Floor Leader Bryan Posthumus of Cannon Township.

DTE and Consumers Energy, the state’s other major utility, have faced criticism this year for the duration and frequency of outages, the most severe of which left some residents in southeast Michigan without power for a week in February.

Michigan’s outage rate is double the national average and the sixth-highest in the nation, according to federal sources. DTE and Consumers have blamed an older grid as well as trees that get entangled in lines.

“Additional investment in the distribution system is necessary to see meaningful improvement in reliability,” said Commissioner Katherine Peretick during the meeting. 

“The reliability of our electric distribution system in the face of increasing severe storms is unacceptable, and the only way to improve is to fix the system.”

The increase comes atop residential bills that the website Statisa estimates are the 11th highest in the nation among states. DTE’s third-quarter earnings were $332 million.

Editor note: This story was updated at 2 p.m. on Dec. 2 to update financial information for DTE and its assertion that rate increases will be less than state estimates, as well as include a statement from a spokesperson from Gov. Gretchen Whitmer.