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Mich. regulators approve $65.8M rate increase for Consumers Energy

The Michigan Public Service Commission on March 29 approved a $65.8 million revenue increase for Consumers Energy Co., an amount less than the utility requested, on a $10.20 billion base rate, effective April 1.

The increase is about 38% of the originally requested increase of $173 million filed by CMS Energy Corp. subsidiary Consumers Energy on March 31, 2017, including an above-average return on equity, or ROE, of 10.5% and a 6.16% return on an average rate base valued at $10.29 billion.

The commission approved a 10% ROE, a capital mix of 52.64% equity to 47.36% debt and an overall 5.89% rate of return. The rate increase approved March 29 is 1.6% higher than Consumers' the last increase in revenue, $113.3 million, approved by the commission on Feb. 28, 2017.

Consumers implemented an interim rate increase of $130 million in October 2017. After the approved rate increase is implemented, an average residential customer using 500 kWh a month will see their monthly bills increase by 59 cents, a change that includes a refund of the interim rate increase.

The PSC allowed the utility to spend roughly $22.2 million on system reliability, enhanced technology and environmental compliance. Consumers was also allowed to spend $51.8 million in its line-clearing vegetation management program to try to keep trees and other vegetation from causing power outages during weather events.

In its integrated resource plan proceeding, Consumers was ordered to provide a standalone analysis evaluating various retirement scenarios for the coal- and gas-fired Dan E. Karn units 1 and 2 and coal-fired J.H. Campbell units 1 and 2 power plants.

Also, the PSC disallowed contingency costs totaling $23.5 million for capital expense items. (Michigan PSC Case No. U-18322)