Consumers Energy is seeking a $325 million, or 7%, hike in electricity rates — an increase that Michigan’s second-biggest electric utility says is needed to begin implementing a multi-year plan to harden and upgrade the grid to avoid outages.
The Jackson-based company filed the request with the state Public Service Commission on Friday, three days after it submitted a summary of the case to regulators. The filing came nearly three months after the state approved a $92 million, or 2%, increase.
The plan calls for burying 35 miles of power lines underground, making infrastructure improvements, automating more of the grid, doing tree-trimming and mitigating wildfire risks, the utility said. The wildfire plan, which includes undergrounding 10 miles of lines in high-risk wildfire areas, is the first proposed by a Midwest energy provider, according to Consumers.
“This proposal shows our strong commitment to delivering more reliable, resilient energy for every customer,” Chris Laird, vice president of electric operations, said in a statement. “We will not let up until our grid is stronger and smarter, and we’ll do it in a way that keeps costs down — preventative measures are 40 percent less expensive to fix than responding to problems. We look forward to working with the Michigan Public Service Commission and others to move ahead with our plan.”
The residential rate hike would be 8.2%. The commercial business class would pay 7.9% more. Industrial customers’ rates would go up 1.4%.
In the filing, the company says the planned extra spending would result in customers experiencing fewer outages on average and, when outages occur, them lasting for shorter periods of time.
The Citizens Utility Board of Michigan, which intervenes in rate cases on behalf of residential customers, has been skeptical that more spending makes the grid better, contending that Consumers has an incentive to make expensive capital investments to boost shareholder profits when there are more cost-effective measures at its disposal. The group has said there is no correlation between how much is spent and whether reliability improves.
The Public Service Commission has 10 months to decide on the rate hike. It typically approves less than what a utility seeks.