November 07, 2024
Lansing, MI – The Michigan Public Service Commission (MPSC) has released its final order in DTE Gas Company’s 2024 rate case. The Commission approved a rate increase by $113 million, less than half of DTE’s requested $266 million, with an ROE of 9.8%.
Notably, the Commission ordered DTE to file an updated gas delivery plan that details how it aligns with state and local energy policies, supports emissions reduction goals, considers energy transition pathways, evaluates costs and risks, and provides a timeline for achieving corporate and state targets. The Clean Energy Organizations (CEO) – the Ecology Center, Environmental Law & Policy Center, Vote Solar, and Union of Concerned Scientists – commend the Commission’s leadership in issuing this first-of-its-kind order for Michigan.
The Commission also issued several related directives, emphasizing the need for DTE to contain costs while continuing to reliably and safely serve its customers as demand for gas declines. Key orders include the reinstatement of DTE’s demand-response program, disallowance of funding for responsibly sourced gas (RSG) premiums, and requiring DTE to consider alternatives to capital investment, such as non-pipe alternatives (NPAs) to significant capital investments.
Despite the many positive outcomes, the CEO is disappointed that the Commission relegated some environmental justice and equity issues to other proceedings rather than incorporating them into the rate case, though it did require DTE to use the MiEJScreen tool in its next rate case. The CEO is also concerned about the approval of DTE’s Infrastructure Recovery Mechanism (IRM), which funds significant capital investments in infrastructure with limited oversight at a time when close scrutiny of such costs is essential.
“The Commission’s order is a step toward aligning Michigan’s energy future with its climate goals and emphasizes the importance of a well-coordinated transition that protects all customers. As Michigan electrifies and gas demand declines, it’s essential that vulnerable communities aren’t left behind or burdened with high costs. This order is a critical step in that direction.”
“We’re glad to see the Commission requiring additional analysis by the company of its plans to decarbonize its gas system and transition to electrification of heating while at the same time also studying whether some customers are being negatively impacted by higher costs and exploring alternatives to reduce expensive capital investments. We know that transitioning to cleaner energy does not have to be more expensive, but it will take careful analysis and planning to do it right.”