Tuesday, February 28, 2023

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. 

1 comment:

  1. Scott - DTE customer/muleMarch 3, 2024 at 7:16 PM

    "Other Power Saupply Volumetric Surcharges" has gone from pennies to dollars very quickly in the last 3 months - (December (2023), January & February of 2024). My bill went from pennies to $1.75, $2.87 and $3.22. As a percentage, these 3 months are off the charts. It's time to find out what this charge entails. Interesting when you google the charge, all the results relate to the "originators" of the bill, DTE and our good friends from the Michigan Govt. If you read this, please check your information and launch the investigation! #brokensystem