The Administrative Law Judge’s (ALJ) issued her 700-page opinion on DTE’s proposed rate increase yesterday. This opinion is an independent assessment of DTE’s proposed rate increase, as well as the formal responses submitted by the Attorney General, and other intervening parties. DTE submitted a rate increase request at the beginning of this year to support substantial investments. This rate increase has received unprecedented attention, both from intervening parties and from ordinary citizens. Vote.Run.Serve-Livonia previously covered last month’s Michigan Public Services Commission public hearing, which heard from several customers voice opposition to the proposed rate increases. Readers can find a summary of that write up here: https://www.facebook.com/photo/?fbid=489869493144714&set=a.480310127433984

Notably, The ALJ cut the requested revenue deficiency in half. DTE calculates this number after forecasting cost over the next few years, then subtracting its current operating revenue. The Michigan Public Services Commission is required the revenue deficiency to evaluate whether the requested rate increase is justified or not. The ALJ outright rejected adopting certain proposed operating costs, such as restricted stock options to senior executives. “…DTE has not justified that it is in ratepayers’ interests to fund the restricted stock grants to executives and directors.” Also suggested for rejection was a study evaluating the possible expansion of the Fermi II nuclear power plant. DTE had sought revenue to study whether the plant could be expanded by nearly 15% of its operating capacity.

DTE sought to raise a part of the revenue increase by modifying the distributed generation program. The program allows property owners with solar arrays to sell excess energy to DTE at a discounted rate. DTE sought to increase tariffs on new distributed generation customers, amounting to about $60 dollars a month while decreasing the buyback rate used by DTE. The ALJ recommended against adopting both of these proposals, and instead actually proposed that DTE be mandated to pay the distribution cost on the energy purchased from distributed generation program customers.

The Michigan Public Service Commission will now open up formal responses to the from DTE and the rate case interveners through the first part of October. DTE customers can expect a formal opinion on this rate increase by the end of November.