AG Nessel files testimony to ‘slash’ UPPCO’s electric rate hike request; UPPCO says it ‘stands behind’ its filing

LANSING, Mich. (WLUC) — Upper Peninsula Power Company is receiving attention at the state level after Michigan Attorney General Dana Nessel filed testimony urging the Michigan Public Service Commission to cut UPPCO’s $17.3 million electric rate hike request by 42%.

A Friday afternoon press release from the AG’s office says UPPCO’s rate hike would amount to a 15.6% average rate increase for residential customers.

“The company is also seeking to increase its profit margin on capital investments from 9.86% to 10.55%, which would make it the highest return on equity in the state and likely one of the highest in the nation,” the release said.

AG Nessel, along with the Citizens Utility Board of Michigan, filed expert witness testimony arguing that UPPCO should receive a rate increase of $9.9 million at most.

Nessel said UPPCO should only receive a 9.47% return on equity and the MPSC should reject UPPCO’s storm restoration expense as another way to increase rates between rate cases. Additionally, she argued the MPSC should reduce the proposed residential fixed monthly charge from $15 to $10.87.

“Electric rates for UPPCO’s residential customers are already significantly higher than the national average, and it’s essential that the MPSC consider this when examining the reasonableness of further rate hikes,” Nessel said. “The MPSC should also reject mechanisms, like the one UPPCO proposes in this case for storm costs, because they only allow the utility to raise rates even higher outside of the usual, public rate review process.”

In a Friday afternoon email to TV6, UPPCO wrote that its rate filing is necessary to maintain reliable service, saying:

UPPCO stands behind its rate filing, which reflects the costs of maintaining a safe and reliable electric system and the investments needed to serve customers across the Upper Peninsula. We appreciate the input from the Attorney General and other participants in the case. UPPCO will continue to participate in the MPSC’s review process, where the Commission will consider the company’s request and the testimony of all parties before making a final decision.

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