DTE seeks to increase fixed charges on solar customers in rate case

Share

If there was any doubt that Michigan utility DTE Energy is waging war on rooftop solar in its service area, the rate case filed earlier this month should put that to rest.

On July 6, the utility filed a new rate case seeking to increase its revenues. Along the way, DTE is seeking to add a new charge to customers deploying solar and increase fixed charges overall, along with a host of other proposals including a move to default time-of-use rates for residential customers and a pilot EV charging program.

DTE was required by the Michigan Public Service Commission to create an inflow-outflow tariff model, but along the way has decided to try and sock its customers who deploy solar with a new System Access Contribution (SAC) of $2.28-$2.31 per kilowatt basis based on the rated capacity of the PV system. This charge is defended by the questionable claim that such customers are “are not supporting the costs of the infrastructure required for their service.”

This is not the only increase in fixed charges that DTE is asking for. The company is also seeking to bump up its fixed charge for residential customers from $7.50 to $9.00 per month.

These charges would have different impacts on PV system owners. The SAC would only apply to new customers, and would be a further nail in the coffin of the state’s distributed solar market, as regulators have already complied with DTE’s wishes in dismantling net metering. The increased residential fixed charge would also somewhat undermine the economics of those customers who installed solar under net metering, in which they are grandfathered for 10 years.

The utility is also seeking an Infrastructure Recovery Mechanism (IRM), which will allow for recovery of costs associated with “certain distribution, fossil generation and nuclear generation capital expenditures through 2022”. If you are tempted to read in here that DTE is seeking to put its customers on the hook for its new $1 billion gas plant, which advocates say is more expensive than cleaner options and which risks becoming a stranded asset, so are we.

None of these details have been mentioned in press coverage of the 1108-page filing. Instead, DTE has managed to divert media attention with a proposal for a new, $13 million program to deploy electric vehicle charging stations in residential and commercial and fleet areas. The vast majority of these would be home chargers and Level 2 commercial chargers, with the token participation of 32 fast chargers.

Overall, DTE is asking to increase rates by an average of 6.7%, with residential customers paying the largest increase of 9.1%. As is inevitable with fixed charge increases those who use the least electricity, including elderly, low-income and customers who own solar would see the biggest jump, with rates increasing almost 12% for customers with a monthly usage of 100 kWh.

Aside from the EV pilot program, the net result is that in its new rate filing DTE continuing its path of doubling down on the energy of the past, by attempting to claw back more revenue from its customers who install solar and creating cost recovery for a new gas plant in an era where large-scale solar, wind and storage are already beating new gas plants on cost.

This rate filing can be seen as DTE’s way of making its customers pay for that strategy. If approved, these rates would take effect May 2019. And if past proceedings are any example, it is likely that Michigan regulators will again disregard their concerns about inadequate support for DTE’s arguments, and roll over and play dead.