MPSC Oks settlement agreement approving $6.6M rate increase for Upper Michigan Energy Resources Corp.

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The Michigan Public Service Commission today approved a settlement agreement granting Upper Michigan Energy Resources Corp. (UMERC) approval to raise rates by $6.6 million, in the Upper Peninsula utility's first electric rate case since the utility was approved to service customers in December 2016 (Case No. U-21541).

The Commission released the order during a regular Commission meeting held at Bay College in Escanaba as the MPSC works to broaden its public outreach and make it easier for customers to participate in regulatory matters. The Escanaba trip follows a series of other recent Commission visits to the UP, including holding a public hearing in July as the MSPC conducts a study of the UP's unique energy issues and meets with UP business, civic and Tribal leaders, energy providers, utility customers and others. It's the first time the MPSC has held a regular Commission meeting in the UP; the Commission has similarly taken its regular meetings to Detroit and Grand Rapids.

UMERC had sought to raise rates $11,162,357 to fund infrastructure investments in new generation, maintaining safety and reliability and other factors. Today's order represents a reduction of more than 40% from the utility's initial request.

A typical residential customer using 500 kilowatt-hours (kWh) a month in the former Wisconsin Electric Power Co. service territory will see an increase of $10.51, or 15.4%, in their monthly bill starting January 1, 2025. The rate realignment charge will decrease annually until 2033, resulting in an additional reduction of $0.21, or -0.3%, by January 1, 2033.

A typical residential customer using 500 kWh a month in the former Wisconsin Public Service Corp. service territory will see an increase of $10.48, or 15.8%, in their monthly bill starting January 1, 2025. The rate realignment charge will increase annually until 2033, resulting in an additional increase of $4.24, or 5.5%, by January 1, 2033.

The settlement agreement permits UMERC to earn an authorized rate of return of 9.86% and a common equity ratio of 50%.

Among other steps, under today's agreement:

• Beginning in 2026, UMERC agrees to opt into the state's Low Income Energy Assistance Fund, which raises up to $50 million each year to fund energy assistance and energy self-sufficiency programs.
• UMERC agrees to implement a residential income allowance and senior bill assistance program.
• UMERC will conduct a line loss study for its entire service territory to inform future requests for a line loss factor before filing another electric rate case.
• UMERC will work with MPSC Staff to develop and file a distribution investment and maintenance plan in Case No. U-20147 by Jan 30, 2026.
• UMERC is authorized to implement a rate realignment plan to gradually unify rates for its two service territories, Wisconsin Electric Power Co., or WEPCO, and Wisconsin Public Service Corp., or WPSC.

The Michigan Department of Attorney General, Citizens Utility Board of Michigan and Billerud Americas Corp. intervened in the case. MPSC Staff also participated. All parties agreed to the terms of the settlement agreement.

COMMISSION OKs UPPER PENINSULA RENEWABLE NATURAL GAS PIPELINE

The MPSC approved a settlement agreement granting a certificate of public convenience and necessity for a DTE Gas Co. to build and operate a 2.1 mile, 2-inch natural gas pipeline in Menominee County, pursuant to Public Act 9 of 1929 and Commission rules for gas production and transmission (Case No. U-21498). DTE Gas proposed the pipeline to transport renewable natural gas, or RNG, from a farm in Daggett Township to the natural gas transmission and distribution system. MPSC Staff and DTE Gas reached the settlement agreement resolving all issues in the case.

COMMISSION APPROVES POWER SUPPLY COST RECOVERY SETTLEMENT AGREEMENT WITH NORTHERN STATES POWER-WISCONSIN

The Commission today approved a power supply cost recovery (PSCR) reconciliation for the 12 months ending Dec. 31, 2023, for Norther States Power Co., A Wisconsin corporation (NSP-W) (Case No. U-21264). MPSC Staff and NSP-W reached a settlement agreement resolving all issues in the case. Today's order permits NSP-W to reflect a total cumulative 2023 PSCR overrecovery of $190,886 as its 2023 PSCR reconciliation beginning balance.

MPSC AUTHORIZES POWER SUPPLY COST RECOVERY SETTLEMENT AGREEMENT WITH UPPER MICHIGAN ENERGY RESOURCES CORP.

The Commission today approved a power supply cost recovery (PSCR) reconciliation for the 12 months ending Dec. 31, 2023, for Upper Michigan Energy Resources Corp (UMERC) (Case No. U-21266). UMERC and MPSC Staff filed a settlement agreement resolving all issues in the case and permitting UMERC to reflect recovery amounts of $290,828 and $252,962 for its Wisconsin Electric Power Co. (WEPCo) and Wisconsin Public Service Corp. (WPSC) rate zones, respectively, as its 2024 PSCR reconciliation beginning balance.

MPSC APPROVES UPPER MICHIGAN ENERGY RESOURCES CORP.'S GAS COST RECOVERY PLAN

The Commission today approved Upper Michigan Energy Resources Corp.'s (UMERC) gas cost recovery (GCR) plan and factors for the 12 months ending Oct. 31, 2025 (Case No. U-21604). MPSC Staff and UMERC filed a settlement agreement permitting UMERC to implement a base GCR factor of up to $0.47338 per therm.

For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the MPSC on Facebook, X/Twitter or LinkedIn.

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.

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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