Lansing, MI - At a meeting held in Detroit on Wednesday July 27, 2022 to provide southeast Michigan residents a chance to address Commissioners directly, the Michigan Public Service Commission approved a cost recovery plan for DTE Gas Co. but warned the utility that costs arising from the use of the NEXUS Gas Transmission LLC pipeline would face scrutiny and may not be recovered.
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.
In Case No. U-20236, the MPSC approved DTE Gas Co.’s gas supply cost recovery (GSCR) reconciliation for the period ending March 31, 2020, as modified, reflecting a net overrecovery, with interest, of $953,138 as its 2020-2021 GSCR beginning balance and a net overrecovery, with interest, of $1,801,559 as its 2020-2021 gas customer choice beginning balance.
While it found DTE Gas’ NEXUS costs and the company's contract with Texas Eastern Appalachian Lease Project (TEAL) reasonable and prudent, the Commission indicated it will continue to closely scrutinize the costs.
The Commission directed DTE Gas to provide in its next reconciliation a robust record to justify the reasonableness of the combined transportation rate of $0.845 per dekatherm per day and evidence of steps taken to minimize the cost of gas, including efforts to renegotiate the transportation agreement. Noting its statutory obligation to evaluate the reasonableness and prudence of the costs incurred in excess of costs approved in a GCR plan case, the Commission said it could disallow certain costs when enough evidence shows them to be unreasonable or when there is not enough information to demonstrate their reasonableness. The absence of such evidence requested in future reconciliation proceedings, the Commission cautioned, shall be an indication that the combined transportation rate is unreasonable and should be disallowed.
The Commission also indicated it expects DTE Gas in its GCR reconciliation case to provide sufficient evidence of the reasonableness and prudence associated with the extension of the TEAL amendment, including documentation of the costs and anticipated savings of the extension.
The Michigan Department of Attorney General, the Retail Energy Supply Association intervened in the case. MPSC Staff also participated.