Michigan Electric Rate Statistics

The following is a summary of electric rates and bills in Michigan. Most data is from the US EIA (Energy Information Administration) and MPSC reports. (Sources listed below)

Summary
Michigan’s electric rates, and particularly our Residential rates, have increased faster than in the US and Midwest and are now considerably higher. In the effort to make our Industrial rates more competitive, substantial rate burden has been transferred to our Residential rate payers, particularly the smallest users. Often, the smallest users are ratepayers with the least ability to pay. These higher electric bills are particularly burdensome since Michigan has some the highest heating bills in the country. Overall, Michigan’s high electric rates and severe rate skewing has diminished the quality of life for many households.

Details

Ten years ago, Overall electric rates in Michigan were below the national average (8.53 vs 8.75 cents per kWh 1st qtr.). Now they are above the national average (11.44 vs 10.27 cents). Our rates increased 34% while the national rates increased only 17%. (EIA)

Ten years ago, Michigan Residential rates were identical to the national average (10.06 cents). Since then, our Residential rates increased 52% vs. only 25% nationally (15.33 vs 12.61).

While Michigan’s Residential rates jumped 52% in 10 years, in sharp contrast, our median household incomes declined 9%. The median Michigan household income was almost the same as the US average in 2005, but dropped $4,800 below thru 2015. http://www.deptofnumbers.com/income/michigan/

The argument that it is OK to raise Residential electric rates because the average Michigan household electric bill (in dollars) was only at the US average doesn’t hold water. Most people pay both electric and gas bills. The total heating/electric bill in Michigan is most likely higher than the US total bill because our heating fuel usage is well above average. Note, there are a number of formulas to distribute costs among the various rate classes.

Michigan routinely ranks among the top 5 in residential use of natural gas. https://www.eia.gov/state/print.cfm?sid=MI

And in this analysis, Michigan electric bills are ranked 43rd in size, but our heating bills are 2nd. https://wallethub.com/edu/energy-costs-by-state/4833/#methodology

Perhaps some explanation for our higher rates, Michigan is one of only 6 states in the top tier of the most accommodative public service commissions for solid return on equity and unique recovery mechanisms. See slide 8 in this May 212017 DTE presentation: http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTUyNTczMTZ8Q2hpbGRJRD02NzE4MTk=

Michigan electric rate situation in 2017

According to the 1st Qtr. 2017 EIA report: https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_b

Residential rates in Michigan are 16% higher than the Midwest average and 18% higher than the US average. Our households have the highest Residential electric rates in the US except for 10 coastal states.

Total (All Sector) Michigan rates are 14% higher that the Midwest average and 11% higher than the US average. This too is the highest rates between the US coastal states.

Industrial rates in Michigan are fairly competitive being only 5% higher that the Midwest average and 11% higher than the US average. Michigan’s Industrial rates are actually lower than those in Wisconsin and Indiana.

Michigan Residential rates are more than double our Industrial rates (108% higher). This skewing definitely favors Industrials compared with the ratios for the Midwest (+84%) and the US (+90%).

If Michigan Residential rates were the same as the Midwest average (18% lower), our households would have saved almost a one billion dollars ($948 million) on their utility bills (18% x $5.264 billion 2016 annual residential expenditures). A billion dollars in the pockets of Michigan’s households would have done more for Michigan’s economy than giving big business these breaks in their electric bills.

DTE and CMS rate statistics according to June 2017 MPSC report: http://www.michigan.gov/documents/mpsc/rates1_594951_7.pdf

DTE

Over the past 10 years, rates for DTE’s average Residential user (500 kWh per month) went up 50% while the average Industrial rate actually declined 1%. DTE’s smallest Residential ratepayers (250 kWh per month) got the worst deal. Their rates went up the most for any rate group (+66%). The DTE rate for these small users (17.38 cents) is now 148% higher than for that for the largest Industrial users (7.00 cents).

Ten years ago, this relationship was far more balanced at only 48%. Ten years ago, the DTE’s Residential users who used the most electricity per month had higher rates than the smallest users (11.17 vs.10.48 cents). Now, the smallest users get the higher rate burden (17.38 vs. 15.61 cents).

CMS

Over the past 10 years, rates for CMS’s average residential user (500 kWh per month) went up 61% while the average Industrial rate increased 30%.

CMS piled the most rate burden on to their smallest electric users (250 kWh per month). Their rates increased 78% while average Residential (+61%) and large users (+54%) suffered less.

The CMS rate for these small users (17.22 cents) is now 103% higher than for that for the largest Industrial users (8.48 cents). Ten years ago, this difference was far more balanced at only 38%.

Ten years ago, CMS’s Residential users who used the most electricity per month had higher rates than the smallest users (10.50 vs.19.69 cents). Now, the smallest users have the biggest rate burden (17.22 vs. 16.15 cents).

It appears ratepayers most able to pay got the rate breaks at the expense of those least able to pay.

Data sources:

EIA Overall: https://www.eia.gov/electricity/monthly/

Q1 2017 https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_b

Trends: Electricity Data Browser https://www.eia.gov/electricity/data/browser/

DTE and CMS rates http://www.dleg.state.mi.us/mpsc/electric/download/rates1.pdf