MPSC OKs $17.3M rate increase for Indiana Michigan Power Co. to fund efforts to boost reliability, requires greater transparency

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The Michigan Public Service Commission today approved a $17,329,000 rate increase for Indiana Michigan Power Co. The approval, which represents a reduction of approximately 50% from what the electric utility requested, provides funds for reliability investments, new generation projects previously approved in the company's integrated resource plan, and initial funding related to the relicensing of the Cook Nuclear Plant, among other elements (Case No U-21461).

A residential electric customer using 500 kilowatt-hours (kWh) per month will see an increase of $3.66, or 4.13%, on their monthly bill. The increased rates are effective July 15, 2024.

Among other expenses, today's order approves I&M's costs for a local area network project to create wireless infrastructure for the utility's Cook Nuclear Plant in southwest Michigan to improve its safety and reliability, as well as the utility's pursuit of license renewal for the plant's Units 1 and 2 to extend operational life.

I&M in September filed a request to increase rates by $34 million, with the utility proposing a return on equity of 10.5%, an overall rate of return of 6.42% and a permanent capital structure of approximately 50.62% equity and 49.38% debt.

Today's order adopts a 52% debt to 48% equity capital structure, an authorized rate of return on common equity of 9.86% and an overall rate of return of 6.03%.

The Commission said it found merit in I&M's advanced metering infrastructure program, for which the utility sought capital expenditures of $26.5 million. However, the Commission found the company's presentation on the program's costs and benefits unsupported and unclear and, therefore, approved only historical spending of $5.8 million for 2021 and $12.046 million for 2022. The MPSC said that, should I&M seek recovery in the future for 2023 and 2024 AMI expenditures, the Commission expects the utility to present clear, persuasive evidence.

The Commission also partially or fully disallowed a number of the utility's IT expenditures, including a full disallowance of the Michigan costs of I&M's PowerPay Program, a voluntary pre-billing option. The Commission found multiple evidentiary deficiencies and a lack of interest in the program among I&M's Michigan customers.

The Commission directed I&M to file a transportation electrification plan, including the utility's comprehensive electric vehicle program proposal for Michigan, in Case No. U-21538. I&M also was directed to present findings in its next general rate case on its shorter pole inspection interval cycle for vegetation management and conduct a cost-benefit analysis on tree trimming.

The Commission accepted I&M's sales forecast but directed the utility to provide such forecasts in future rate cases in a replicable format for easier access and verification for those involved in the case.

The MPSC last approved a rate increase for I&M in January 2020 for $36.4 million.

Intervenors in the case included the Association of Businesses Advocating for Tariff Equity; the Michigan Department of Attorney General; Citizens Utility Board of Michigan; City of Auburn, Ind.; Ecology Center; Environmental Law and Policy Center; Vote Solar; Energy Michigan; Great Lakes Renewable Energy Association; Michigan Energy Innovation Business Council; Institute for Energy Innovation; Advanced Energy United, and Wabash Valley Power Association.

MPSC SEEKS COMMENT ON PROPOSED FUNDING FACTOR FOR LOW-INCOME ENERGY ASSISTANCE

The Michigan Public Service Commission has proposed to set the funding factor for Michigan's Low-Income Energy Assistance Fund (LIEAF) at 87 cents, down a penny from the previous year (Case No. U-17377). LIEAF raises up to $50 million per year, assessed through a monthly per-meter charged on retail electric billing meters. The monthly factor cannot exceed $1. LIEAF funding is distributed through nonprofit service agencies across the state through the Michigan Energy Assistance Program, or MEAP. Administered by the MPSC in partnership with the Michigan Department of Health and Human Services, MEAP assisted 56,948 households in 2023. LIEAF, created through Public Act 95 of 2013, is a significant source of help for families struggling to pay home energy bills. State law requires the MPSC to set the LIEAF funding factor by July 31 each year for the following fiscal year, based on participation by investor-owned, municipally owned and rural electric cooperative utilities. Under the law, non-participating utilities are not allowed to shut off service to any residential customer from Nov. 1 to April 15 for nonpayment of a delinquent account. In addition, state law requires that funds need to be returned to the regions of the state from which they were collected, to the extent possible.

COMMISSION OKs PARTIAL SETTLEMENT OF DTE ELECTRIC'S VOLUNTARY GREEN PRICING PROGRAM, DENIES REHEARING REQUESTS

The MPSC approved a partial settlement agreement resolving customer-requested offering issues in DTE Electric Co.'s request for approval of its voluntary green pricing (VGP) program, which permits customers to voluntarily specify a certain amount of electricity purchases to be from renewable energy resources, with costs of the program billed to participating customers (Case No. U-21172). The Commission also denied petitions for rehearing of an earlier order sought by the Michigan Energy Innovation Business Council, Institute for Energy Innovation, and Advanced Energy United, and separately from Soulardarity and We Want Green, Too.

CONSUMERS ENERGY GAS PROJECT IN OAKLAND COUNTY GETS GO AHEAD

The Commission authorized Consumers Energy Co. to build and operate new pipeline segments to transport natural gas from storage wells to new gas processing equipment and tie into existing lines pursuant to Public Act 9 of 1929 (Case No. U-21589). Today's order approves a new, approximately 500-foot, 12-inch pipeline connecting the existing Lyon 29 well to new gas processing equipment; an approximately 750-foot extension of the existing 12-inch 29/34 Line to new gas processing equipment; and a new, approximately 1,200-foot, 16-inch pipeline to connect the new gas processing equipment to the existing 16-inch 1020 Line. Consumers says the $5.1 million project will improve gas purity and measurement accuracy and increase pipeline reliability by reducing corrosive components from the gas stream, and the alternative of taking no action would not satisfy revised Michigan standards for natural gas.

COMMISSION GRANTS PERMANENT LICENSE TO AT&T ENTERPRISES

The MPSC granted a permanent license to AT&T Enterprises LLC to provide basic local exchange telephone service in Michigan (Case No. U-21625). Owing to internal corporate restructuring, AT&T Enterprises was to assume all assets and operations of the former AT&T Corp.

For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the MPSC on Facebook, X/Twitter or LinkedIn.

To look up cases from today's meeting, access the MPSC's E-Dockets filing system.

Watch recordings of the MPSC's meetings on the MPSC's YouTube channel.

DISCLAIMER: This document was prepared to aid the public's understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission's orders. The Commission's orders are the official action of the Commission.

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