Attorney general: How long will DTE be given a 'blank check' to raise rates?

• DTE is seeking a $574 million rate increase.
• The state attorney general is questioning why it is necessary.

Three months after the state Public Service Commission greenlighted a $217 million rate hike for DTE Energy, the utility is seeking another — this one, $574 million, is more than twice as what was granted — and, if approved, will result in higher electricity bills.

“We must continue to invest to deliver the cleaner and more reliable energy our customers demand and deserve,” DTE said in an email to Free Press on Wednesday, adding it “is making progress on building the electric grid of the future.”

However, some, including the Michigan attorney general, are questioning why the utility needs the additional money and whether the added revenue will benefit customers or is aimed at improving the bottom line to make the company more attractive to investors.

Groups and individuals have a chance to object to the rate hike.

The public service commission, a state agency charged with regulating public utilities, must approve the proposed increase, a process that includes hearings and usually takes almost a year.

The request comes not only on the heels of a hike but as Michiganders face an uncertain economic future with high inflation, increased costs on goods from the president’s trade wars, and high interest rates on car loans and mortgages.

The ask is also a month after a $153.8 million increase for Consumers Energy.

A Free Press investigation last year also raised questions about whether the public service commission was too close to the companies it is supposed to oversee and whether it should do more to track, investigate, and act on complaints.

Michigan Attorney General Dana Nessel said last week that her office plans to look into DTE’s request, which is the second highest in company history and the fourth in five years, according to Detroit Planet, a nonprofit news organization focused on the environment.

The utility said the increase is necessary, Detroit Planet reported, to pay for infrastructure investments and improving reliability, which could reduce power outages by 30% and restore service 50% faster by 2029.

“At some point, we have to ask how long utility companies like DTE and Consumers Energy will be allowed to treat customer bills and our energy rates like a blank check,” Nessel said. “My office will carefully scrutinize this rate hike request.”

The last rate hike for DTE, which bills itself as “one of the largest” utilities in the nation, raised residential customers’ bills an average of $4.61 per month, more than $55 a year. The utility’s new ask would mean an 11% increase, $162 a year, on top of that.

Nessel, who has been critical of the Detroit-based utility for service that she has said customers are “very dissatisfied” with. In the last request for a rate increase, she claimed credit for saving customers nearly $240 million.

In a late January statement after DTE’s rate hike was approved, Nessel pointed out that DTE initially asked for a $456.4 million increase, which she said was “stacked on top of a previous DTE electrical rate hike.”

She argued that the rate increase was too high and the utility did not need executive perks such as private corporate jet travel and other luxuries or $39 million in incentives that were tied to shareholder financial benefits.

More recently, in March, Nessel convinced the public service commission to disallow DTE to collect $33.7 million from customers to purchase power, which she said, and the commission agreed, was an improper charge.

She added the charges “benefit only their shareholders or otherwise result from imprudent or unreasonable management of outages, mismanaging or poorly planning their own power generation, or even purchasing power through sweetheart deals with affiliated or formerly affiliated energy companies.”

At the same time, DTE told the Free Press there has been a nearly 70% improvement in time spent with out power in 2024, compared to 2023 and a rate hike would support the utility’s “ongoing work to improve electric reliability and system resiliency.”

What’s more, an audit commissioned by the public service commission and released last year found DTE and Consumers Energy, Michigan’s two largest utilities, had worse-than-average power restoration times in comparison to other utilities.

And in late August, two days after severe thunderstorms knocked out power to a half-million Michigan customers, utility customers questioned whether the utility credits established by the pubic service commission were sufficient to adequate compensate them.

Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com.