Michigan AG Opposes DTE's $266M Rate Hike, Citing Excessive Costs

Michigan Attorney General Dana Nessel opposes DTE Energy's $266 million gas rate hike request, calling it "excessive and unnecessary." Nessel's office suggests a more modest 4% increase, citing concerns over corporate jet travel expenses and frequency of rate hike requests.

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Aqsa Younas Rana
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Michigan AG Opposes DTE's $266M Rate Hike, Citing Excessive Costs

Michigan AG Opposes DTE's $266M Rate Hike, Citing Excessive Costs

Michigan Attorney General Dana Nessel has filed testimony opposing DTE Energy's request to increase its gas rates by $266 million, calling the proposal "excessive and unnecessary." The Detroit-based energy company filed the request with the Michigan Public Service Commission (MPSC) in January.

Why this matters: This rate hike proposal has significant implications for Michigan residents, as it could lead to increased energy costs and affect the overall affordability of living in the state. Furthermore, the Attorney General's opposition highlights the importance of regulatory oversight in ensuring that corporations prioritize customer needs over profiteering.

Nessel's office points to DTE's estimated $74,769 in jet travel costs, which includes leasing private aircraft for executives at the vice president level and above for business trips. Business consultant Sebastian Coppola, testifying on behalf of the Attorney General's Office, recommends disallowing recovery of these costs, stating, "I recommend that the Commission disallow recovery of costs for privately hired corporate jet use, particularly since the travel pertains to investor and board of director matters that do not directly benefit customers but instead may benefit shareholders." challenges, private

As an alternative, Coppola suggests commercial flights, noting they would be less costly and have less environmental impact, aligning with DTE's goal of achieving net zero carbon emissions by 2050. DTE spokesperson Ryan Lowry defends the company's travel expenses, stating that they are a fraction of the costs for limited air travel for business-appropriate needs, including industry association meetings and meetings necessary to attract capital investment into Michigan.

Nessel's office argues that DTE should receive a rate increase of no more than $112.2 million, resulting in a 4% increase in customer bills. This proposal is intended to provide DTE with necessary funding for infrastructure upgrades while keeping the increase modest for customers. rate increase DTE's proposed rate hike would result in a 6.5% increase to the average customer's bill.

DTE Gas filed a rate request with the MPSC earlier this year to receive approval of the company's investment plan, which aims to replace and modernize over 4,000 miles of aging cast iron pipes to prevent leaks and deliver safe and reliable service while keeping energy affordable for customers. Nessel criticizes the frequency and basis of DTE's rate hike requests, stating, "DTE files these rate hike requests fast and flimsy; we consistently find very little support for many of DTE's claims. Case in point, DTE Gas is asking the MPSC for permission to bill its customers for corporate jet travel by executives. These are the kind of expenditures they hope we don't notice that drive up ratepayer bills and offer zero improvement to service or reliability."

DTE Energy also filed a request to increase its electrical rates in March, in addition to the gas rate hike request. Attorney General's Office The Michigan Attorney General's Office continues to scrutinize DTE's rate increase proposals, aiming to protect consumers from excessive costs while ensuring the company has the necessary resources to maintain and upgrade its infrastructure.