Residential Electric Rates in Michigan

Michigan’s electric rate situation today
According to EIA electric statistics for the month of July 2017 (most recent available):

  • Michigan’s Industrial electric rates are fairly comparable to those in the Midwest and US
  • Commercial rates in Michigan are also fairly comparable to those in the Midwest and US
  • The All Sector rates in Michigan, however, are significantly higher than those in the Midwest and US
  • The greatest gap is that Michigan’s Residential rates are much higher than those in the Midwest and US. Our Residential rates are 20% higher and higher than in all but 11 US coastal states
  • Michigan’s Residential rates are more than double our Industrial rates (113% higher). This severe rate skewing is higher than in all but three other US states.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_06_a

Ten year trend
Comparing rates in the second quarter 2017 vs. Q2 2007:

  • Michigan’s Residential ratepayers were the hardest hit with a 52% increase vs 20% for Residential in the US
  • Our Industrial rates increased only 12% vs. 8% nationally
  • Michigan’s All Sector electric rates increased 33% vs 15% for the US

Major skewing within the Residential rate classes
According the September MPSC statistics:

  • 10 year ago, Residential ratepayers who used the least amount of electricity 250 kWh/mo. had the lowest rates among residential users. Today, they have the highest rates while those who consume a much higher amount (1,000 kWh/mo.) receive the lowest Residential rates

DTE: Over the past 10 years, DTE’s smallest Residential users (250 kWh per month) experienced the highest rate increase (69%) and the big Residential users were impacted less (46%).
In sharp contrast, DTE rates for their largest industrial users had the smallest increase of only 4% over the past 10 years. http://www.dleg.state.mi.us/mpsc/electric/download/rates1.pdf

CMS: CMS piled even more on to their smallest electric users. Over the past 10 years, rates for their smallest residential users increased 77% vs 56% for those using 1,000 kWh per month or more. Rates for the largest CMS industrial users increased only 12%
http://www.dleg.state.mi.us/mpsc/electric/download/rates1.pdf

Electric and high gas bills must be considered together
While Michigan’s household electric bills (in dollars) are comparable to the US average, our heating bills are ranked 2nd highest in the US. Most ratepayers pay both gas and electric bills and they must be considered together. https://wallethub.com/edu/energy-costs-by-state/4833/#methodology
Flat electric bills also ignore that Residential electric usage has declined roughly 7% over the past 10 years.

The trend towards piling ever increasing electric rate on to our smallest Residential users is placing a major burden on those least able to pay.