MPSC Approves Settlement Agreements for New Gas Rates for Consumers Energy Co. and Electricity Rates for Alpena Power Co.

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The Michigan Public Utilities Commission today approved settlement agreements increasing rates for Consumers Energy Co. natural gas customers and Alpena Power Co. electric customers.

The Commission approved the settlement agreement with Consumers Energy that authorizes the utility to increase its natural gas distribution rates by approximately $35 million, effective October 1, 2024 (Case No. U-21490).

The amount approved today represents a reduction of nearly 75% from the $136 million Consumers originally requested. Under the settlement agreement, Consumers was granted a return on common equity of 9.9% and a common equity ratio of 50.0%. The Company had requested a return on common equity of 10.25% and a common equity ratio of 51.50%.

The settlement agreement also provides direction in several areas, including the company's sale this year of its unregulated home energy program to a third-party buyer for an initial gain of approximately $110 million. Consumers will share the entire initial gain with their customers; $27.5 million will be used to offset the company's approved revenue shortfall and $82.5 million will be credited to customers over a three-year period.

A typical customer who consumes 100 ccf of natural gas per month will see their monthly bill increase by $1.16, or 1.15%, before the application of the home product sales credit. After the application of the credit, a typical customer who consumes 100 ccf per month will see their monthly bill decrease by $0.27, or 0.27%.

In addition, Consumers is authorized to spend $215.3 million for the year ending September 30, 2025 under its Enhanced Infrastructure Replacement Program (EIRP), which is designed to replace the company’s most at-risk pipelines in terms of safety, reliability and efficiency. Consumers will continue to file annual EIRP planning and performance reports and will host an annual technical conference in January for interested parties that will provide the technical basis and support for the plastic and steel pipeline projects selected in the EIRP planning report.

Intervenors in this case were the Michigan Department of Attorney General, the Fair Rate Business Association, the Retail Energy Supply Association, the Lansing Board of Water & Light, Michigan State University, the Citizens Utility Board of Michigan, and Energy Michigan. MPSC staff also participated in the case. All parties signed the agreement.

The Commission last approved a natural gas rate increase for Consumers Energy in August 2023 for $95 million.

Separately, the MPSC authorized an amended settlement agreement that allows Alpena Power Co. to implement a $2.5 million rate increase, with the utility agreeing not to seek another rate increase until 2026 (Case No. U-21488).

The settlement agreement, which resolves all issues in the case, represents a decrease of nearly 37 percent from the $3,959,588 originally sought by Alpena Power, to fund increased operating expenses, including labor, equipment and materials costs, investments in its power plant, as well as vegetation management costs and other expenses.

The settlement agreement provides for a return on equity of 9.85% and an overall rate of return of 6.29%. The utility had requested a return on equity of 11.91% and an overall rate of return of 7.15%.

The new rates, effective today, will cost residential electricity customers who use 500 kilowatt hours per month an increase of $9.07, or 10.82%, on their monthly bill. The Commission last approved a rate increase for Alpena Power on January 1, 2022, in the amount of $1,250,000.

The Attorney General’s Office intervened in the case. MPSC staff also participated, and all parties signed the agreement. The agreement prevents the utility from seeking another rate increase before January 1, 2026. The Commission also ordered Alpena Power to file a separate amortization filing by December 22, 2026.

Among other measures, today's order also allows Alpena Power to continue its electric vehicle charging pilot program through December 31, 2028 and revises its usage periods in several tariffs.

For more information about the MPSC, visit www.michigan.gov/mpscsign up for his Monthly News Or other mailing listsFollow the MPSC on Facebook, X/Twitter Or LinkedIn.

To search for cases from today's meeting, go to MPSC Electronic File Filing System.

Watch recordings of MPSC meetings on the The MPSC YouTube channel.

DISCLAIMER: This document has been prepared to assist the public in understanding certain matters before the Commission and is not intended to amend, supplement or replace any Commission Order. Commission Orders constitute the official act of the Commission.

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