Michigan gives DTE approval for $113.8M gas rate hike: What it means for your bill

The Michigan Public Service Commission (MPSC) on Thursday approved Detroit-based DTE's request to hike natural gas rates by around $113.8 million, meaning the average customer will see about a $2 increase on their monthly bill.

In regulatory filings, DTE officials said the rate increases are needed to pay for investments in the company's infrastructure as well as rising operational and maintenance costs. The company initially sought to increase its natural gas rates by $266 million in January.

The rate increases approved Thursday amount to a 2.28% increase for DTE's natural gas rates. That means a typical residential customer using 100 cubic feet of natural gas per month will see an increase of $1.98 on their bill at the end of the month.

In a statement, DTE officials said the lower-than-initially-sought rate increase "may inhibit our ability to implement the work that will allow us to continue providing the level of service that our customers have come to depend on."

The company pointed to planned infrastructure upgrades and goals for carbon emissions as two areas potentially affected.

"We're currently assessing the rate order’s impact on the progress of our work, including our gas main renewal program - the upgrade of older cast iron pipes with modern, more durable materials that not only provide increased safety and reliability but also reduced emissions," a statement provided by a DTE spokesperson said.

Commissioners also approved an "Infrastructure Recovery Mechanism" surcharge — beginning Nov. 21, customers will see an increase of 66 cents on their monthly bill. The surcharge will increase annually until 2029, when it reaches $6.28, according to the MPSC.

DTE provides natural gas service for about 1.3 million people in Michigan.

Attorney General Dana Nessel's office was among the parties intervening in the case, calling for commissioners to approve a lower rate than the utility initially sought.

“The Commission's decision to slash DTE's requested rate hike by more than half will save consumers hundreds of millions of dollars on their utility bills,” Nessel said in a statement.

Testimony filed by Nessel's office previously indicated DTE had sought to include costs for private jet travel in the rate increase. Regulators agreed with Nessel's assertion that ratepayers should not have to bear the cost for company executives' travel, removing a $74,769 allowance from the rate increase.

"The Attorney General recommended that the Commission disallow recovery of costs for the use of the jet because it does 'not directly benefit customers but instead may benefit shareholders,'" MPSC staff wrote in their 308-page approval of DTE's rate increase.

DTE did not challenge Nessel's assertions, according to the filing.

The MPSC is the three-member body that considers rate increase requests from utility companies. It most recently approved a rate increase for DTE's natural gas services in Dec. 2021, when regulators signed off on an $84 million rate increase.

Regulators are also currently considering a proposed $456 million rate increase for DTE's electric service. DTE electric provides power to around 2.2 million people in Michigan, mainly in southeast Michigan.

(This story was updated to add new information.)

Contact Arpan Lobo: [email protected]