The Michigan Public Service Commission granted Consumers Energy a sharply reduced rate increase Tuesday, but a credit tied to the utility’s sale of a products program means natural gas customers will actually pay less over the next three years.
The utility is authorized to raise its natural gas distribution rates by approximately $35 million, effective Oct. 1., according to a release from the commission. The amount is a 75% reduction from the $136 million Consumers initially requested.
“Under the settlement agreement, Consumers was granted a rate of return on common equity of 9.9% and a common equity ratio of 50%. The company had sought a return on common equity of 10.25% and a 51.50% common equity ratio,” the release stated.
This year, Consumers Energy sold an unregulated home energy products program to a third-party buyer for an upfront gain of about $110 million. Consumers will share all of the upfront gain with customers; $27.5 million will be used to offset the company’s approved revenue deficiency and $82.5 million will be credited to customers over a three-year period, according to the release.
A typical customer using 100 cubic feet, which is the basic unit for measuring the volume of natural gas used, will see an increase of $1.16, or 1.15%, on their monthly bill before the credit. After the credit is applied, the same customer will see a decrease of $0.27, or 0.27%, on their monthly bill.
“Consumers Energy is committed to modernizing our natural gas system, making it even more safe, clean, reliable and affordable for our 1.8 million customers,” spokesperson Brian Wheeler said in an email. “This settlement allows us to make needed investments while keeping bills as low as possible, including providing customers with additional benefits from the sale of our Appliance Service Plan.”
Intervenors in the case were the Michigan Department of Attorney General; Association of Businesses Advocating Tariff Equity; Retail Energy Supply Association; Lansing Board of Water & Light; Michigan State University; Citizens Utility Board of Michigan and Energy Michigan. All parties signed the settlement.
In addition, Consumers is authorized by the commission to spend $215.3 million by Sept. 30, 2025, on its Enhanced Infrastructure Replacement Program, aimed at replacing the company’s highest-risk pipes.
In March, the commission approved a $92 million rate increase for Consumers Energy Co. electric customers. The Commission last approved a natural gas rate increase for Consumers Energy in August 2023 of $95 million.
Separately, the Michigan Public Service Commission authorized an amended settlement agreement that permits Alpena Power Co. to implement a $2.5 million rate increase — impacting electric customers’ bills — with the utility agreeing not to seek to raise rates again before 2026.
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