Attorney general, citizens group call DTE's proposed gas rate hike excessive

DTE Gas Co. is seeking a nearly $204 million increase in revenues, including an 8.3% increase for residential customers' monthly bills that state Attorney General Dana Nessel calls "excessive and unreasonable."

DTE Gas' rate case was filed with the Michigan Public Service Commission last November, and the utility requests it become effective this October for its 1.2 million residential and commercial customers in Michigan. The company is the second-largest gas provider in the state, following Consumers Energy's 1.7 million gas customers.

DTE officials, in their filings with the MPSC, said their request is primarily driven by ongoing and increasing investment in its natural gas infrastructure across Michigan, including the continued modernization of its natural gas distribution system. The upgrades support DTE Gas’ goal to reduce methane emissions by 80% by 2040, company officials said.

But the proposed rate hike now could hurt ratepayers reeling from the novel coronavirus pandemic, causing layoffs, closed businesses and more economic chaos.

Contacted Friday by the Free Press and asked about the rate hike amid  COVID-19's impact on the community, DTE Gas responded with an emailed statement from Dan Brudzynski, vice president of gas sales and supply.

"Customer affordability is always one of our top concerns, which is why our filing also includes support for low-income customer assistance programs to protect our most vulnerable customers by expanding eligibility for these programs," he said.

State Attorney General Dana Nessel has criticized the proposed increase in a statement. The Attorney General's Office regularly comments on filings before the MPSC.

"While I certainly appreciate the need to continue to improve natural gas infrastructure in the state to ensure our supply is safe and reliable, that must be balanced against the ever-present affordability concerns that confront many Michigan households and businesses," she said.

DTE Gas shares Nessel's concerns about providing customers with affordable energy, Brudzynski said.

"We're also committed to providing safe and reliable natural gas with the least amount of impact possible to the environment, and this requires additional investment," he said.

In DTE Gas' last rate case before the MPSC, in 2017, it requested an 11.1% increase on residential rates. The commission ultimately approved just a 0.2% average residential rate hike, however.

The proposed gas rate hike comes as DTE Energy, the utility's electricity side, has had more than $775 million in four rate hikes since 2015, the second-biggest total rate hike in the country to only the vastly bigger Florida Power & Light Co. DTE Energy last July requested even more, a $351 million increase that would increase residential customers' monthly bills by more than 9%, or about $9.85 per month.  Late last month, an administrative law judge instead recommended an increase of just under $100 million for DTE Energy.  The MPSC will ultimately determine both the gas and electric rate cases.

The Citizens Utility Board of Michigan, a nonprofit representing Michigan's residential utility customers on rate cases, also finds the requests excessive.

"I'd say the same thing about the gas case as I would the electric case: Even under normal circumstances, the proposed rate hike for residential customers is too high. And these are anything but normal circumstances," said Amy Bandyk, executive director of the Citizens Utility Board.

An MPSC decision on the electric rate case will likely come first, but neither is scheduled. The gas case might continue through the summer.

"It's still pretty early in the case," Bandyk said.

The public can comment on the proposed rate increases. Reference case number U-20642 for the DTE Gas rate case, or U-20561 for the DTE Energy electric case, and send comments by email to mpscedockets@michigan.gov, or by regular mail to:

Executive Secretary

Michigan Public Service Commission

P.O. Box 30221

Lansing, MI 48909

Contact Keith Matheny: (313) 222-5021 or kmatheny@freepress.com. Follow on Twitter @keithmatheny.