Michigan Public Service Commission approves business as usual on spending and return on equity, but orders the Company to broaden consideration of energy justice in its business process, and expands innovative electric bus procurement model and low-income EV rebates
Lansing, MI – On Friday, December 1, 2023, the Michigan Public Service Commission (MPSC) released its final order in utility giant DTE Electric Company’s 2023 rate case. In its order, the Michigan Public Service Commission approved a rate increase of $368 million, a little more than half of DTE’s requested $619 million.
The Clean Energy Organizations (CEOs) – the Ecology Center, Environmental Law & Policy Center, Vote Solar, and Union of Concerned Scientists – are disappointed that the Commission authorized such a significant rate increase for DTE which will raise residential rates by roughly 6.38% while also holding one of the highest return on equities in the Midwest at 9.9%. The Commission sent the message to the Company that bottom quartile performance was worthy of a continued rich reward through its return on equity.
Despite the CEO disappointment regarding some of the top line issues in the cases, there were at least three notable positives that came out of the Commission order that related directly to the important advocacy work of the Clean Energy Organizations.
First, the Commission ordered the Company to perform important energy justice and reliability analyses in future rate cases as recommended by the CEO and MPSC staff. Among these important additions to future rate cases are: more detailed environmental justice analysis on community vulnerability, better data on customer interruptions, better availability of GIS data, and climate resiliency planning in future distribution grid plans.
James Gignac, Midwest Senior Policy Manager at Union of Concerned Scientists, said:
“Under today’s order, DTE will be required to provide important information going forward on how its grid planning affects environmental justice communities. Based on expert testimony and recommendations of MPSC Staff, DTE will now need to be more transparent and better assess how vulnerable customers experience the costs and benefits of DTE’s electricity system.”
Second, and relatedly, the Commission ordered the Company to use a robust method for understanding the differential reliability experience of customers in environmental justice communities in future grid plans. This recommendation was spurred by the excellent testimony of Vote Solar’s Boratha Tan, Midwest Regulatory Manager, and Will Kenworthy, who demonstrated the important relationship between duration of outages and race, income, and population density.
Will Kenworthy, Midwest Regulatory Director at Vote Solar, said:
“In our testimony, the CEOs demonstrated that there are clear and meaningful differences in reliability experiences of customers in environmental justice communities. The Commission adopted many of our recommendations to understand existing disparities and to address them through improved, more transparent, and robust planning processes. We were particularly pleased that the Commission singled out our innovative approach to using regression analysis to more accurately understand the relationship between equity and reliability.”
Third, the Commission approved the expansion of the Company’s eFleet battery pilot into a permanent program. This program allows the utility to finance the upfront costs of electric batteries for buses for school districts and transit authorities who may not be able to afford these high costs. This will benefit all Michiganders by spurring electrification and taking dirty diesel engines off the road.
Charles Griffith, Climate and Energy Program Director at the Ecology Center, said:
“We’re pleased the Commission’s Order approved the Company’s eFleet battery program as well as low-income EV purchase rebates. However, it could have gone further to approve other pilots that would provide more equitable access to charging infrastructure, such as the proposed Community Chargers program. While a rebate program will help low-income households afford the purchase of an EV, without a place to charge them, EVs will remain unattainable for many.”
The Commission also acknowledged the need to improve transparency in the Company’s distribution system planning process, including more thorough, robust, and transparent application of the Company’s Global Prioritization model. While it declined to require contested cases in the distribution grid plans, the Commission admonished DTE to lend serious consideration to incorporating Staff and stakeholder feedback into its distribution plan process.
Going forward, the CEO will continue to engage across the many dockets which these issues of equity and justice in electrical regulation are considered. While we are heartened by the positive steps taken by the Commission today, we remain committed to achieving grid equity and creating a just and equitable clean energy transition.