MPSC Approves Settlement Agreement Authorizing Consumers Energy Company to Increase Natural Gas Rates; Customers to See Refund

Contact:  Judy Palnau, 517-241-3323
Agency:  Michigan Public Service Commission

June 7, 2012 - The Michigan Public Service Commission (MPSC) today approved a settlement agreement authorizing Consumers Energy Company to increase its natural gas rates by $16 million annually, below the amount the company began to self-implement on March 1 ($23 million).

As a result, the MPSC has directed the utility company to refund to its natural gas customers approximately $7 million on an annual basis, plus interest, subject to reconciliation.  Today's order directs Consumers Energy to file a reconciliation application with the MPSC within 90 days regarding the refund.

A residential customer using 100 hundred cubic feet (ccf) of natural gas per month will see a decrease of approximately 37 cents on their monthly bill.

Consumers Energy on Sept. 2, 2011 filed an application requesting a $49.3 million rate increase.  The final amount approved today ($16 million) is 68 percent below what the utility requested and represents an increase of 2 percent over the rates set in its last natural gas rate case (Case No. U-16418).

Under the terms of the settlement: Consumers Energy's authorized rate of return on common equity is 10.3 percent; its current gas revenue decoupling mechanism will remain in place until April 30, 2012, for reconciliation purposes; and the utility will fund a main replacement program at $56 million annually until the program is reviewed and spending reset by the Commission in a final order in the next general rate case proceeding.

The utility, MPSC staff, Michigan Attorney General, Association of Businesses Advocating Tariff Equity, the Michigan State Utility Workers Council, et al, the Michigan Community Action Agency Association, Interstate Gas Supply, Inc., Midland Cogeneration Venture Limited Partnership, and Retail Energy Supply Association participated in the settlement.

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

Case No. U-16855

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