Today, the Alliance for Industrial Efficiency submitted public comments to the Michigan Public Service Commission regarding the treatment of standby rates in DTE Energy’s 2018 rate case. In the comments, the Alliance expressed three main concerns with the DTE proposal. Namely, DTE proposes to: (1) increase its rates by increasing power supply capacity charges and distribution charges for all customers, regardless of whether they are standby customers who use the grid infrequently; (2) increase its standby rates by increasing power supply capacity charges for standby customers and by ignoring the Commission’s direction to incorporate forced outage rates in the calculation of the generation reservation fee; and (3) increase its distribution charge rate with no proration for standby customers, and with no study to support its claim that standby customers impose the same costs on the distribution grid as full requirements customers.
To address these issues, the Alliance recommends that the Commission: (1) reject DTE’s proposal to increase its power supply capacity charges and distribution charges for standby customers; and (2) require DTE to complete a study to determine the actual costs of providing standby service and to incorporate forced outage rates into the calculation of the reservation fee. Ensuring that tariffs reflect equitable cost allocation will help keep electricity costs lower for all consumers and help cut electricity and thermal costs for Michigan’s manufacturers, making them more competitive.
Additionally, three organizations—the Michigan Chemistry Council, the Michigan Forest Products Council, and Timber Products of Michigan—also delivered a letter today to the Michigan Public Service Commission in support of fair and reasonable standby rates and outlining similar concerns.