MI: Utility rate-design proposals roll in


Consumers Energy has filed its rate design application and supporting testimony with the Michigan Public Service Commission (Case No. U-17688), as required by legislation enacted in June 2014. Consumers Energy’s proposal is similar to DTE’s recent proposal. Both DTE and Consumers Energy have proposed changes that would eliminate volumetric distribution charges for large non-residential customers that receive service at primary distribution or transmission voltages, in favor of assessing all distribution charges under a demand rate. Similarly, for these same customers, the utilities have proposed changes that would raise demand charges for energy supply and transmission components, while lowering the volumetric components. In addition, both utilities have proposed devising the cost allocation methodology to define all production capacity and transmission costs as demand-related, as opposed to the current division of 50% demand, 25% on-peak and 25% total energy.

The intervention deadline in DTE’s case (U-17689) is October 10, 2014, and a public pre-hearing conference will be held October 17, 2014. The PSC has not yet issued a hearing notice for Consumers Energy’s case.

Background: Pursuant to legislation enacted by Michigan in June 2014, the PSC has ordered Consumers Energy, DTE and Indiana Michigan Power to file proposals that examine the cost-allocation methods and rate-design method they use to set rates for their electric customers. The PSC has also advised eight smaller electric utilities that they may voluntarily file such applications.