Jan. 19--Consumers Energy electricity customers will see the cost of their electricity increase after the Michigan Public Service Commission approved a $155 million hike and a $6 million surcharge.
A typical residential customer of the Jackson-based utility using 500 kilowatt hours a month will see an increase of $2.10, or 2.06%, on their monthly bill, according to the MPSC. After a year, that'll decrease by $1.33, or $1.28%, because of a surcharge and credit expiring. After that, the hike represents an increase of 77 cents, or 0.75%.
The new rate takes effect Friday in the middle of winter and as expectations for increasing interest rates to curve inflation persist. It's a 43% reduction from the increase the utility originally sought.
The hike will support trimming trees, new technologies and other ways to ensure reliability of the grid, according to a statement from spokesman Brian Wheeler. Consumers Energy services 1.8 million electricity customers in the western and central parts of the Lower Peninsula.
The company also is issuing a one-time voluntary refund of $15 million in revenue from 2022 through a 12-month, automatically applied credit. Customers need not do anything to receive this discount. This refund is included in the MPSC's estimate for the hike increase.
An additional $10 million shareholder-funded contribution will go to programs for low-income customers. Those struggling to pay energy bills can call the company at 800-477-5050 for assistance. The company notes it has provided $37 million in help for energy bills and other needs since the start of last year.
"We understand many Michiganders are facing challenging times, and no one wants to see rising energy bills especially our most vulnerable customers," Wheeler said. "We are working to manage the increasing costs of energy supply as we continue to help customers manage their monthly bills and provide payment assistance programs to customers in need."
The settlement agreement sets the authorized rate of return for Consumers, which is a part of the publicly traded CMS Corp., on common equity at 9.9%.
The utility originally requested to raise rates by $272 million and then later increased that to $293.5 million. A settlement filed in December reduced that amount to $155 million. The additional surcharge will recover for a 2021 distribution deferral.
Consumers Energy is pursuing a plan to end the use of coal-powered energy in 2025. It intends to replace the production with existing natural gas plants and new renewable energy sources, including solar.
Also as a part of the agreement, Consumers is making its PowerMIDrive pilot incentive for residential electric vehicle chargers permanent. The program includes a $500 rebate for installation and $10 monthly discount. The company wants to power 1 million EVs by 2030.
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