Both Consumers and Detroit Edison reach the 10% Cap on
Now that competition has effective ended for these 2 utilities, what incentive do they have to keep electric prices competitive???
In the past month or so, both Detroit Edison and Consumers Energy announced that they have reached the 10% cap on customers that can but their energy from an alternative supplier. Currently, both utilities also now have a waiting list of customers that want to leave the respective utility’s if and went space becomes available.
Jim Hilgendorf, Superintendent, Johannesburg-Lewiston Schools
Michael Dewey, Superintendent, Bay-Arenac ISD
Robert Brady, Associate Director Business Services, Waterford School District
Mitch Bart, Director of Facilities, Kent ISD
Ken Simon, Facilities Manager, Ingham ISD
Pam Smart, Business Office Supervisor, Van Buren
John Stoner, Director of Facilities, Operations & Transportation, Rochester Community Schools
Ray Telman, Executive Director,
Ex-officio Member To The Executive Committee
David Martell, Executive Director,
Consumers Energy: On January 22, 2010, Consumers Energy filed for a new rate increase. This filing proposes various tariff changes and that Consumers Energy be granted a rate increase of either $178M (5.1%) (if the Michigan Public Service Commission grants the implementation of a new Rate Decoupling Mechanism (RDM), as proposed by Consumers) or $282M (8%) if they do not grant the RDM proposal. If the Commission does not grant the RDM proposal, then it is likely that Consumers will file for an additional $104M increase.
This recent rate requests comes a little more than 2 months after the Commission granted Consumers a $139M (4.3%) increase last November.
As you may recall, under Michigan's new utility law, Consumers can "automatically" implement this proposed rate as an interim rate increase on or after July 22, 2010 and a final decision must be issued on or before January 21, 2011 or the proposed rates become approved as filed.
Detroit Edison: On January 11, 2010 the Michigan Public Service Commission granted Detroit Edison a rate increase of $217M (4.8%). This increase was the result of a January 26, 2009, filing requesting an increase of $378 million per year.
Please recall that Detroit Edison's last rate increase was authorized on December 23, 2008 (yes, that was just 33 days prior to the 1/26/09 filing). The new energy legislation passed in 2008 allows a utility to file for rate increases as often as they like. This new law creates an incentive for continuously filings for rate increases. Will be see another filing soon.????
Indiana Michigan Power: On January 27, 2010, Indiana Michigan Power filed for its first rate increase in 18 years. I&M is proposing a $68M rate increase. Whereas the dollar amount is not as large as the other utility’s, the percent increase is rather large. If approved, I&M is estimating that their rates will increase an average of 30% per rate class. Expect a rather large interim surcharge in this case on or about July 1.
Natural Gas: Just like the electric utilities, the natural gas guys are also jumping on the rate increase bandwagon also:
Consumer Energy: In May of 2009, Consumers filed for a $114.4 (approximately 15% of the distribution charge or ~ 5% overall) million rate increase. While this case is still pending, remember that after 6 months they can file for an interim rate increase and guess what? On November 19, 2009 they did just that. On January 11, 2010 an increase of $217M (4.8%) was approved. Consumers structured these charges so that they would recover approximately $89 million (which is approximately 78% of what Consumers asked for in the original filing).
Rate GS-1 $0.3386/Mcf
Rate GS-2 $0.2505/Mcf
Rate GS-3 $0.1803/Mcf
Rate ST-1 $0.1376/Mcf
Rate LT-1 $0.0997/Mcf
DTE (MichCon): On June 9th, 2009, DTE filed a request to increase their natural gas rates by $193 million. The MPSC has not yet ruled on this case but surprisingly DTE has self-implemented a rate increase.
GS-1 - $0.8997/Mcf. - This is an increase of approximately 35% of the distribution or delivery rate only.
GS-2 - $0.6946/Mcf. - This is an increase of approximately 35% of the distribution rate only.
ST - $0.4623/Mcf. - This is an increase of approximately 38.5% of the distribution rate only.
LT - $0.2011/Mcf. This is an increase of approximately 21% of the distribution rate only.
Michigan Gas Utilities: On July 1, 2009, Michigan Gas Utilities (MGU) filed a request with the Michigan Public Service Commission (MPSC) to increase their natural gas rates by $8.5M. On December 16, 2009, the MPSC approved an annual increase of $3.5M, which is approximately 59% less than MGU requested. The new rates will take effect on January 1, 2010.