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Rate hike approved for Consumers Energy: What it means for Michigan customers

The rate increase will take effect Oct. 1, 2023

Consumers Energy electric worker at substation. (Thomas Gennara, Consumers Energy)

A $95 million rate hike was approved for Consumers Energy this week, which means residential customers will be paying a bit more starting this fall.

The Michigan Public Service Commission (MPSC) approved settlement agreements permitting rate increase for natural gas customers of Consumers Energy and Michigan Gas Utilities Corp.

The Commission approved the rate hike of $95 million, which is 55% lower than the requested $212 million by Consumers Energy. The utility company said the rate hike was needed to address capital infrastructure improvements, investment in technology and operational efficiency, and increased financing costs.

---> Related: Michigan commission approves larger power outage credits for impacted residents

What it means for customers:

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:

  • 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. Consumers Energy offers gas and electric services across most of the Lower Peninsula.

---> Consumers Energy exploring possible sale of 13 hydroelectric dams across Michigan


About the Author
Ken Haddad headshot

Ken Haddad has proudly been with WDIV/ClickOnDetroit since 2013. He also authors the Morning Report Newsletter and various other newsletters, and helps lead the WDIV Insider team. He's a big sports fan and is constantly sipping Lions Kool-Aid.

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