State of Michigan approves $157 million natural gas rate hike for Consumers Energy

LANSING, Mich. — The Michigan Public Service Commission approved a natural gas rate increase for Consumers Energy on Tuesday.

Consumers Energy was approved to raise rates by $157,495,000, an over 36% decrease from the $248 million increase the company initially requested, but lowered to $217 million.

The new rates will go into effect on Nov. 1. An average customer using 75 ccf (hundred cubic feet) will see an increase of $6.44, or 8.1% on their monthly bill, the commission said in a release.

The raise is aimed at boosting the safety and reliability of its gas pipeline system by replacing gas lines most at risk of leaks and interruptions, according to officials.

The Commission approved a $208.93 million for Consumers’ enhanced infrastructure replacement program.

Additionally, the Commission also:

• Directed Consumers to provide a thorough justification of its contribution in aid of construction (CIAC) and customer attachment program methodologies. This must include whether it is appropriate to revise the company’s assumptions to include declining natural gas demand, customer adoption rates for the customer attachment programs based on historical experience when calculating new attachment surcharges, and how to avoid unfair subsidization by existing customers. A CIAC is money or property contributed by a customer to cover a portion of the costs to connect the customer to new gas service.
• Approved expenditures addressing a backlog of known leaks at an accelerated rate, in advanced compliance with a proposed federal Pipeline and Hazardous Materials Safety Administration Leak Detection and Repair rule. While the proposed federal rule isn’t expected to come into effect until 2028, the Commission found that tackling the backlog of known leaks is a reasonable and prudent opportunity to support of safe and reliable gas service.
• Approved costs for investment in the company’s city gate stations that raise or lower gas pressure as needed. The costs will pay for rebuilding and other improvements to improve the safety and reliability of the utility’s aging city gates that may not be meeting performance expectations.
• Approved proposed costs for Consumers’ advanced methane detection program, which will improve the company’s ability to detect small gas leaks to lower risk, enhance public safety, and reduce environmental exposure to methane emissions.
• Approved costs for Consumers’ Lyon Northville gas storage field dehydration equipment to provide gas delivery during peak events. The Commission noted that it’s essential to be able to draw sufficient reasonably priced gas for customer usage during peak times, and important for the utility’s ability to provide gas for both residential customers and electric generation customers at times of peak usage.

The Commission also directed Consumers to present detailed evidence in its next gas rate case, demonstrating the company’s efforts to to offset inflation with productivity increases.