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:
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.
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