DTE seeks residential rate increase. Here's how much you'd pay

Detroit — DTE Energy Co. will ask the Michigan Public Service Commission Thursday for $456 million in rate relief — equating to roughly 37 cents a day for DTE customers who will start to see rate increases reflected in their bills in January 2025, if approved.

"This case is incredibly important for us to continue to do the work that we do to build the grid of the future and continue to improve reliability in the state and continue to transform our generation," said Matt Paul, president and COO of DTE Electric, DTE Energy's electric utility.

This would be a 3.1% increase in residential bills since January 2021, which is below national inflation increases. DTE reported its 2023 average residential bill at $115. The requested rate relief is driven primarily by projects planned for 2025 and higher financing costs, such as higher borrowing costs due to higher interest rates, the release stated.

DTE officials said they're proposing a 37 cent per day rate relief, but the commission has the authority to approve a range between 22 cents to 37 cents per day for customers. That means customers could see a jump — depending on energy usage — in January 2025, as the case filing kicks off a 10-month process.

"Nobody is the average customer," said Trevor Lauer, vice chair and president of DTE. "We have 2.3 million meters that serve 6 million customers in the state of Michigan ... so when we say an average of 37 cents a day it might be 80 cents a day for me, it might 6 cents a day for you. It really depends on how you use our product — hopefully, you're using our energy-efficiency products. If your home is very efficient you see very little increase."

Last fall, DTE released a $9 billion roadmap to improve reliability, and this week's announcement would mark a continuation of that plan. The energy company's goal is to reduce power outages by 30% and cut outage duration down by 50% by 2029 —two metrics that perennially have bedeviled DTE and its customers.

To do so, the energy company plans to transition to a smart grid by updating technologies, upgrading infrastructure, rebuilding significant portions of the grid, and trimming trees. DTE Electric has filed applications to increase rates three times in the last 5 years, according to the Michigan Public Service Commission.

The Citizens Utility Board of Michigan has scrutinized DTE for recent rate cases. It says the utility overlooks cost-effective ways to reduce outages, and it says it favors more expensive approaches that "enrich" its shareholders, said Amy Bandyk, executive director of the board, in an email to the News.

"DTE says it is 'reaffirming its reliability commitment,' but its actions show that it is has not learned from the mistakes that have made it one of the most unreliable electric utilities in the country," Bandyk said in the email. "For example, the utility proposes spending hundreds of millions of ratepayer dollars on unnecessary equipment replacements, while not significantly emphasizing investments in technology that can detect outages before they happen."

DTE wants to modernize its electric system by adding 10,000 smart devices — which can cost up to $100,000 each —to circuits that bring electricity into homes. These devices would communicate with DTE's smart grid, aiding in rerouting power faster and alerting workers when there are circuit faults like power line disruptions.

The devices would also help DTE workers pinpoint more precisely the location of outages so crews can deliver quicker and more efficient service.

"We're aggressively updating our existing infrastructure," Paul said. "It's critical that we do continue to accelerate this work. We do have one of the older grids in the country. They were initially built when Detroit industrialized. Last year alone, we inspected and updated equipment along 1,700 miles."

Detroit, Hamtramck and Highland Park — places that were electrified first — will see the majority of the investments in such infrastructure equipment as stronger poles and fiberglass crossarms to withstand extreme weather, DTE officials said. Also planned: rebuilding the McGraw substation in Dearborn.

"You can only maintain your car for so long before you eventually need to get a new car; well that's where we are with the oldest parts of our grid," Paul said. "We have about 16,000 miles that we need to replace, so we're in the early stages of ramping that full replacement. We're talking about building entire substations from scratch, entire circuits from scratch. On these full rebuilds customers see about a 90% improvement in reliability."

The rate relief would also go towards tree trimming around equipment and power lines, which the company does every five years to keep up with tree growth. Trees falling on DTE's equipment account for 50% of power outages, the release stated.

"We have about 20% left. By the end of 2025, we'll be 100% through all the trees and then we have to stay on that five-year cycle," Paul said. "You see about a 40% improvement in reliability for a very modest cost."

Marc Brown, vice president of state affairs for Consumer Energy Alliance, said in an email to The Detroit News that the rate increases are a response to renewable energy and climate policies imposed by legislature and Gov. Gretchen Whitmer.

“As is always the case, low- and fixed-income Michiganders will be hit hardest by the rate increases — approximately $10 a month on average," he added. "There is a growing trend around the country for legislators and regulators to place blame on anyone but themselves for energy costs driven higher by their own costly policy decisions. Reducing emissions is a good thing —and it’s something that can be done while ensuring reliable and affordable energy service."

DTE is also pursuing projects as part of its goal to end the company's use of coal in 2032. That includes converting the Belle River coal-fired power plant to natural gas, which would reduce carbon emission by 90%, as well as retiring the Monroe power plant in 2028.

The Detroit-based company is also repurposing the recently retired Trenton Channel Power Plant to become the Trenton Energy Center, which will support renewable energy development by storing excess energy until it's needed during periods of high demand.

mjohnson@detroitnews.com

@_myeshajohnson