Understanding the line items on a DTE Electric bill

When you look at a DTE Electric bill, it might not be immediately obvious what the major line items you are getting charged for actually mean. Here is one of my recent bills, for DTE's D1.2 Enhanced Time-of-Use electric service: 

The major line items on this bill are: 

• Power Supply Capacity Charge (with different on-peak and off-peak prices)
• Power Supply Non Capacity Charge
• Power Supply Cost Recovery
• Service Charge
• Distribution Charge

I will explain what these line items mean one by one. 

Power Supply Capacity Charge

Because I am a full-service DTE electric customer, DTE has a legal obligation to ensure that they will be able to acquire (whether by generating it themselves, buying it from other companies, or other means) enough electricity to supply whatever I might demand, whether I actually demand (use) it or not. The "capacity charge" line item is intended to allow DTE to recover the costs they incur through their efforts to ensure they will be able to supply whatever electricity I might demand at any given time. 

You may notice that the per-unit (kWh) capacity price is much higher for energy I consume during peak demand periods (weekdays 11am - 7pm on my particular plan) than it is for the energy I consume at all other times (8.682 cents/kWh vs. 0.79 cents/kWh). This is because DTE has to spend real money to ensure they can meet their customers' aggregate demand during times when most of their customers are using the most energy. Having already spent that money, they do not have to spend much additional money to ensure they can meet demand during periods when most of their customers are not using much energy.

An example of a cost that would be recovered by the Power Supply Capacity Charge would be the costs associated with owning and maintaining a generating unit that they need to own in order to meet potential demands, but may or may not actually be operating at any given time (like a peaker plant unit). 

Power Supply Non Capacity Charge

This line item is intended to allow DTE to recover the marginal cost they incurred to supply (generate, purchase, or acquire by other means) the energy I actually consumed. 

Examples of costs that would be recovered by the Power Supply Non Capacity Charge would include the cost of buying energy from another electric company in order to supply my usage, or the marginal costs of fuel/etc incurred in generating electric energy to supply my usage. 

Power Supply Cost Recovery

Because the cost of fuel to operate power plants varies more rapidly than most other costs incurred by an electric utility, there is a separate procedure from a general rate case that DTE can use to ask to recover costs stemming from changes in fuel prices. These costs are accounted for in the Power Supply Cost Recovery line item. I do not currently understand the PSCR rulemaking process, but I intend to figure it out in the near future. 

Service Charge

DTE would incur some costs associated with keeping electric service available at my house even if I never actually consumed any electricity. The fixed monthly service charge is intended to recover these costs. 

Distribution Charge

This line item is intended to allow DTE to recover the costs associated with moving the electricity I use from the place where it is bought/generated to the place (my house) where it is used. This is the most expensive line item on the bill, in large part because it covers expensive infrastructure (the wires running down my suburban residential street, the transformer across the street from my house that serves my and three other nearby houses, etc) that isn't necessarily shared by a large number of heavy energy users. 

Hunting, home protection, or... other? 

I have very little idea what the following line items on this bill mean: 

• Other Power Supply Volumetric Surcharges
• Other Delivery Volumetric Surcharges

Obviously, they are per-kWh charges associated with power supply and delivery, respectively. But I find it somewhat offensive that DTE is allowed to put a line item on a bill that simply reads "other". 

No, the "other" charges aren't very high, and yes, I'm sure they were approved by the MPSC at some point, but I do not know what costs they are intended to recover and I do not think it is appropriate that they can be charged with zero explanation. If/when I figure out what these charges are about, I will probably write a post explaining them. 

DTE Rate Case U-21297 (2023): Initial filing summary

In February 2023, DTE Energy filed an application "for authority to increase its rates, amend its rate schedules and rules governing the distribution and supply of electric energy, and for miscellaneous accounting authority" and supporting materials with the MPSC in rate case U-21297.

This post will summarize the major proposals DTE made in this filing that I feel are generally of interest to residential electric customers/ratepayers.

Proposed Residential Rate Increases

DTE is asking to raise rates on the following residential plans by approximately[1] the amounts shown:

Rate Plan	Approximate[1] Rate Increase
D1 - Former default residential plan	18.9%
D1.1 - Separately-metered interruptible air conditioning service	15.5%
D1.2 - Enhanced Time-of-Use plan	16.9%
D1.8 - Time-of-Use with Dynamic Peak Pricing plan	14.5%
D1.9 - Separately-metered Time-of-Use EV charging plan	15.4%
D1.11 - Standard Time-of-Use plan (new default residential plan)	13.7%

Prior to 2023, most residential customers were on the D1 plan. In 2023, most residential customers will be moved to the D1.11 plan. Detailed pricing information about the current and proposed rate plans is available here.

These are hefty increases which, if approved, will substantially increase household electricity bills.

[1] What DTE is actually requesting is to increase the rates associated with each of these plans by amounts that will increase the revenue they expect to earn from all subscribers to that plan by the given percentage over the period of time beginning on December 1, 2023 and ending on November 30, 2024. 

Proposed New D1.13 Overnight Savers Rate Plan

DTE is proposing to add a new optional residential service plan which they are calling D1.13 - Overnight Savers. This is a time-of-use plan with two seasons and three time windows.

Seasons

• Summer months: June - September
• Winter months: October - May

Hours

• On-peak Hours:                 Weekdays 3:00 pm - 7:00 pm
• Super Off-peak Hours:      Every day 1:00 am - 7:00 am
• Off-peak Hours:                 All other hours

Prices

• Summer On-peak:             34.28 cents/kWh
• Summer Off-peak:             24.403 cents/kWh
• Summer Super Off-peak:  11.559 cents/kWh
• Winter On-peak:                18.308 cents/kWh
• Winter Off-peak:               15.194 cents/kWh
• Winter Super Off-peak:     11.559 cents/kWh

Compared to the proposed D1.2 and D1.11 time-of-use plans, this new D1.13 plan has much higher summer peak and off-peak rates but its summer super off-peak rate is quite a bit lower. The D1.13 plan's winter peak and off-peak rates are comparable to those on D1.2 and D1.11, but its winter super off-peak rate is substantially lower. 

This might be a good rate plan for households that use a lot of energy during the super off-peak (1:00 am - 7:00 am) hours and do not use a lot of energy during the summer off-peak and (especially) peak hours. A household making heavy use of night-time electric vehicle charging and using little or no air conditioning might fit this profile.

DTE is proposing to make this rate plan available to customers during the "test year" of December 1, 2023 through November 30, 2024. DTE further proposes to limit this rate plan to a maximum of 10,000 customers during the test year. 

Other DTE Proposals

As is apparently typical of these rate cases, DTE is proposing several minor changes to other existing rate plans and to begin/modify/continue a number of other projects and pilot programs, including but not limited to:

Minor Rate/Rider Changes

• New Rider 22 - company-financed customer-sited EV charger installation
• Changes to D1.9 rate to facilitate shared/community EV charging
• Changes to Rider 14 (less-restrictive business/industry-focused distributed generation/feed-in tariff) to permit vehicle-based and stationary batteries to sell energy to DTE
• Changes to Rider 18 (more-restrictive homeowner-focused distributed generation/feed-in tariff) to update the rates DTE pays for energy sold to them to reflect the new underlying rate plans

Pilot Programs

• "Smart Charge" EV charging demand-response pilot
• Battery energy storage
• Pre-paid electric service option
• Peak Time Savings program
• Residential Generator program

Projects

• Subtransmission redesign & rebuild
• City of Detroit Infrastructure project
• 4.8 kV conversion
• 8.3 kV conversion
• Strategic undergrounding
• Primary deconductoring
• Various distribution hardening projects
• SOC modernization
• Tree trimming
• Various IT-related projects

Several of these items are likely to be the topics of future blog posts. 

Concluding Remarks

The price increases DTE is proposing are hefty, especially coming just months after the conclusion of their previous rate case (U-20836). I do not relish the thought of paying these increased rates, and am not sure the company "deserves" to be granted these rate increases either in a general-fairness sense, or in the more legalistic sense that will be evaluated by the public service commission in this rate case. 

I am painfully aware that DTE's electric distribution system is in dire need of reliability upgrades, that these upgrades will cost money, and that that money has to come from somewhere. But I question the wisdom of simply throwing more money at DTE in the hope they will spend it wisely, given the company's above-average prices and below-average reliability. 

Although I am more interested in the technical aspects of the electric system than the business/financial ones, I do plan to try to explain some of the legal and financial aspects of DTE's rate case proposals in future posts. 

While I am not happy about the large rate increases DTE is requesting, I did not see any other extremely-objectionable proposals in my first read of the case. This is a pleasant contrast to their previous rate case application (U-20836) which contained several very distasteful proposals. 

Who am I, and why am I blogging about DTE Energy?

Introduction

I have been a DTE residential customer (or "ratepayer," as the company tends to call us) since about 2005 and, for almost as long, have been unimpressed with the company's electric service. I have found their electric service reliability to be poor in several locations throughout southeast Michigan, have had the company refuse to address chronic voltage problems, and find the price they charge to be rather high, especially for such poor-quality service.

In addition to being somewhat dissatisfied with DTE's electric service, I am also a nerd with a strong interest in the technical (and, to a lesser extent, the business) aspects of the electric generation, transmission, and distribution industries. Because of this, I have spent quite a lot more time than the average customer reading various documents including those filed in DTE's various cases before the Michigan Public Service Commission (the state body responsible for regulating electric utilities in Michigan). 

These documents contain a lot of interesting information, but they aren't particularly accessible to the average person. They are often very long, poorly indexed, difficult to search, and written in a difficult-to-understand legal/technical style. The documents tend to contain a very large amount of information that is not particularly interesting to most people, which makes it additionally difficult to find the interesting-and-relevant details they do also contain.

In 2022, I began following the application DTE had made with the Michigan Public Service Commission (MPSC) to raise their rates and make various changes to their rate structures. A pattern emerged in which I would occasionally find a few paragraphs' worth of material my nerdier friends and I found interesting in any given multi-hundred-page filing in the case. Distributing this information to the friends and acquaintances who found it interesting proved to be somewhat unwieldy, and I received more than one suggestion that I should start a blog to write about such things. 

It is now February 2023 and DTE has filed another rate case (as they're called) with the MPSC. So, I've started this blog to post my analysis of and opinions about the new rate case as well as other DTE and energy-related matters.

Educational and professional background

While I am interested in electric power systems and have an undergraduate-level engineering education, I:

• am not, and have never been, a Professional Engineer.
• do not work in the electric power industry in any capacity.
• have no formal education in electric power systems or business.
• have very little formal education in economics.

Conclusion

I think this post encompasses what you might want to know about me and where I'm coming from with what I write on this blog. My next post will be an analysis of what DTE is requesting in their initial filing in their 2023 rate case U-21297.