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Regulators grant DTE Energy rate increase, but customers will get refunds

DTE Energy Co. has been given the go ahead by the Michigan Public Service Commission to raise its electricity rates by $184 million. However, the annual increase means customers will actually see a refund plus interest in the future because the increase, which will take effect Feb. 7, is less than the amount the company self-implemented in August 2016.

DTE Energy originally asked the commission to approve a rate increase of $344 million, but in August 2016 boosted its rates $245 million. Thus, the increase approved by the MPSC is 46% below what the company originally sought, and residential customers using 500 kWh of electricity a month will see a decrease on their monthly bills starting in February, compared with the rates they have been paying since August 2016.

The increase will be used to upgrade DTE Energy's distribution infrastructure, according to MPSC Chairman Sally Talberg.

"One of the primary reasons that customers experience power outages is the lack of maintenance and the age of electric distribution equipment such as substations, transformers and wires," Talberg said in a Jan. 31 statement.

The MPSC therefore asked DTE Energy to file a comprehensive five-year plan detailing system improvements to address aging infrastructure and ensuring safe and reliable operations in the future. The draft of that report will be due July 1, and the final version must be completed by Dec. 31.

The rate increase was opposed by Michigan Attorney General Bill Schuette, who argued that DTE Energy had recently raised residential rates by 11%. The Sierra Club, Natural Resources Defense Council and Michigan Environmental Council also filed to intervene in the matter.

Responding to Schuette's concerns, DTE said the company recognizes the need to keep utility rates affordable but the utility's system is in need of upgrades. The company asserted that the increase was part of its "continuous improvement" efforts to lessen the impact of increasing routine operating costs without reducing quality of service to customers. (Case No. U-18014)