The Michigan Public Service Commission on Friday approved a $276.6 million rate increase for Consumers Energy Co. electric customers.
A residential customer using 500 kilowatt-hours (kWh) a month will see a monthly increase of $6.46, or 6.1%, according to the MPSC. The new rates will take effect May 1. The Jackson-based utility serves nearly 2 million electric customers in lower Michigan.
The increase is intended to support the utility’s ongoing efforts to improve the reliability of its power grid, according to the MPSC. The commission also approved $21.7 million in additional deferral costs and $14.6 million for cloud computing costs. Consumers Energy has said the investments are aimed at reducing outages and speeding up restoration times.
“Consumers Energy is helping our customers by securing the grid and giving them the tools to reduce and manage their bills,” Greg Salisbury, the company’s senior vice president of electric distribution, said in a statement Friday. “Our Reliability Action Plan represents an investment that will lead to fewer and shorter power outages. At the same time, we understand the impact of rising costs, so we will continue to help people lower and manage bills while making upgrades to power their lives more reliably.”
The approved amount is about a third less than the company’s most recent request of $423 million. The approval follows a $153.8 million rate increase the MPSC approved for Consumers Energy electric customers in March 2025.
Amy Bandyk, executive director of the Citizens Utility Board of Michigan, said in a statement Friday that the organization is still reviewing the order.
“It is good that the MPSC didn’t grant Consumers Energy the full extent of its rate hike request, but still, the 6.1% residential rate increase approved today is much higher than the rate of inflation, which was 2.8% in 2025 according to the Congressional Budget Office,” she wrote. “That means the MPSC’s order today will continue to worsen the energy affordability crisis facing Michiganders.”
CUB pushed back on Consumers Energy’s claims it needs to hike rates on its customers to ensure reliability.
“That doesn’t hold up for at least two reasons: First, a big portion of the rate increase approved today has nothing to do with reliability,” Bandyk wrote. “The MPSC has let down ratepayers by allowing Consumers Energy to collect more profit for its shareholders than the national average.”
Bandyk said commissioners approved a 9.9% return on equity, which she said is the amount of profit the utility can collect for shareholders. The national average ROE for electric utilities in the U.S. is around 9.7%, Bandyk said.
“The MPSC went against its own staff, which recommended 9.75% for ROE,” she wrote. “CUB’s expert testimony recommended a 9.2% ROE, and doing so would have saved ratepayers over $41 million per year compared to what the MPSC approved today.”
She said CUB has pointed out in testimony in previous cases, there historically has been no relationship between how much Consumers Energy has spent on the distribution grid and reliability outcomes.
“Essentially, it’s not about how much you spend,” she wrote. “It’s about how smart you are with your spending.”
Consumers Energy said Friday that about 75 cents of each customer dollar goes directly back into securing the grid. The utility says it intends to double this decade the number of miles where it trims trees, bury more power lines this year to protect them from storms and threats that cause outages, install poles that withstand stronger winds and storms, add technology that instantly reacts to interruptions, and to secure the grid against physical and cyber threats.
“We know the cost of everything is going up, from energy to health care to groceries,” Kelly Hall, senior vice president of regulatory and legal affairs for Consumers Energy, said in a statement. “That’s why we ensure that we’re making smart, cost-effective upgrades to secure the grid, fix problems before they happen, and improve reliability for our customers. Consumers Energy works hard to help our friends and neighbors, through money-saving programs and connecting people with assistance that helps manage bills.”
cwilliams@detroitnews.com
This article originally appeared on The Detroit News: Consumers Energy approved for second electric rate increase in a year
Reporting by Candice Williams, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
