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MI Gas Co Gets Approval For Most Cost Recovery Requests

Michigan Business NewsLansing, MI - On Thursday, January 18, 2024, the Michigan Public Service Commission approved DTE Gas Co.’s application for a gas cost recovery reconciliation, reflecting a net underrecovery of more than $49 million as the utility’s 2022-2023 beginning balance.

See: Case No. U-20817

The Commission approved a net gas cost recovery reconciliation underrecovery of $49,210,603, with interest. The Commission also approved a net overrecovery, with interest, of $1,773,987 as the utility’s 2022-2023 gas customer choice beginning balance.

Gas cost recovery reflects the actual cost of utility-purchased natural gas itself; utilities are not allowed to mark up or profit from the commodity. Reconciliation of a utility’s projected and actual costs are handled at the end of each year.

In today’s order, the Commission reaffirmed prior determinations that DTE Gas Co.’s contracting for use of the NEXUS Gas Transmission LLC pipeline was reasonable and prudent at the time it was entered into. But the Commission also noted that DTE Gas is still under a “continuing obligation to monitor and respond to market conditions and system needs with the burden to demonstrate the reasonableness and prudence of its fuel costs.” Formerly a partnership between the utility’s parent company, DTE Energy, and Enbridge Inc., NEXUS is a 256-mile, 36-inch interstate pipeline transporting natural gas from receipt points in eastern Ohio to interconnections in southeast Michigan.

The Commission, meanwhile, disallowed $656,602 in penalty waivers DTE Gas had sought for violation of tariff rules regarding unauthorized gas use by end-use transportation customers that exceed their respective storage withdrawal quantity. The Commission found that DTE Gas cited no authority or precedent by which it could abandon the tariff requirements.

The Michigan Department of Attorney General and the Retail Energy Supply Association intervened in the case. MPSC Staff also participated.

MPSC OKs CONSUMERS ENERGY’S REQUEST FOR ACCOUNTING TREATMENT OF MATCHING FUNDS FOR FEDERAL GRANT FOR 3 MICROGRID PROJECTS

The MPSC approved Consumers Energy Co.’s request for accounting treatment of up to $20.3 million in matching funds for its application for a federal Infrastructure Investment and Jobs Act of 2021 grant from the U.S. Department of Energy to support the development of microgrids in Michigan (Case No. U-21524). The utility, in partnership with Advanced Battery Concepts, has proposed a pilot project called “Microgrids to Mitigate Outage Impacts for Rural Areas.” Because of uncertainty about federal funding and a lack of project details currently available, the Commission directed Consumers to engage regularly with MPSC Staff on funding, project design, and implementation planning to assist Staff and the Commission in future reviews of the prudency of project costs in a future proceeding, and to file updates on the pilot in future rate cases to support any recovery of costs the utility may seek, including a final report upon completion.  

DTE ELECTRIC SOLAR ENERGY CONTRACTS APPROVED

The MPSC approved several contracts related to solar energy projects requested by DTE Electric Co. (Case No. U-21361). The Commission approved DTE Electric’s application for ex parte approval of engineering procurement and construction master service agreements for the utility’s Fish Creek Solar Park, Little Trout Solar Park and Mission Road Co-Location Solar Park, master supply agreements for solar panel modules. The bundled levelized cost of energy for the projects is expected to be $61-$63 per megawatt-hour; in aggregate, the utility estimates the installed cost to be $1,676 per kilowatt. The Commission will review final costs for the three solar park projects in a future renewable energy reconciliation proceeding after they enter commercial operation. 

SCHEDULE OF 2024 COMMISSION MEETINGS RELEASED

The MPSC has released its schedule of regular Commission meetings for 2024. The Commission will meet:

    Feb. 8, 1 p.m.
    March 1, 10 a.m.
    March 15, 10 a.m.
    April 11, 1 p.m.
    April 25, 1 p.m.
    May 23, 1 p.m.
    June 6, 1 p.m.
    July 2, 1 p.m.
    July 25, 1 p.m.
    Aug. 22, 1 p.m.
    Sept. 5, 1 p.m.
    Sept. 26, 1 p.m.
    Oct. 10, 1 p.m.
    Nov. 7, 1 p.m.
    Nov. 21, 1 p.m.
    Dec. 19, 1 p.m.

To look up cases from today’s meeting, access the MPSC’s E-Dockets filing system.

Watch recordings of the MPSC’s meetings on the MPSC’s YouTube channel.

For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs.

DISCLAIMER: This document was prepared to aid the public’s understanding of certain matters before the Commission and is not intended to modify, supplement, or be a substitute for the Commission’s orders. The Commission’s orders are the official action of the Commission.

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