Summary of EIA and MPSC electric rates

By Frank Zaski

The following are summaries of recent EIA and MPSC electric rate statistics with emphasis on the Residential category.

EIA May 2018 Statistics

The EIA reports national and state electric rates and other electric statistics.

  • Comparing May 2018 with May 2017, Michigan Residential electric rates increased while rates declined for Commercial, Industrial, Transportation and Overall.
  • For the 5-state Midwest region, rates declined in all rate categories.
  • Only 10 states have higher Residential electric rates than Michigan. We just passed New Jersey in the rankings.
  • Michigan’s Residential rates are 119% higher than our Industrial electric rates. Only four other states have a more burdensome skew in favor of industry.

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

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

MPSC July 2018 Statistics

The MPSC reports monthly rates for Michigan’s regulated electric utilities. Big industry in Michigan is benefiting from a major shift of their electric rates to the smallest and poorest ratepayers (250kWh/month).

  • Comparing July 2018 with July 2017, electric rates for the smallest CMS Residential users increased 3.3% but declined 3.7% for the largest Industrial users. The cents per kWh gap is substantial, 17.74 vs 8.13 (118%).
  • The gap is even larger for DTE ratepayers; 17.55 (¢/kWh) vs. 7.23 (a 143% difference). Rates for DTE Industrial users went up 3.3% and Residential increased 1.0% since last year.
  • Ten years ago (July, 2008), the percent gap between DTE’s smallest Residential users and the largest Industrial users was 49%, now it is 143%. This gap for CMS ratepayers was 42% 10 years ago, now it’s 118%.
  • The reason? There was a 48% rate increase for the smallest CMS Residential users over the past 10 years, while their largest Industrial users received a 4% decrease. Small Residential ratepayers at DTE had their rates increase 64% over the past 10 years while rates for the largest Industrial users were held flat.

Within the Residential rate category alone, there has been a major rate shift from the largest (1000kWh/month) Michigan Residential user to the smallest (250kWh/month).

  • In 2008, rates for the smallest DTE Residential users were actually 6% lower than for the largest users. Today, small users have a 10% disadvantage compared with big Residential users. At CMS, the gap between the big and small users was 3% ten years ago. Now it is 10%.

https://www.michigan.gov/documents/mpsc/rates1_594951_7.pdf

https://www.michigan.gov/mpsc/0,4639,7-159-16377_52818—,00.html

In addition to an over-stimulated economy and the largest federal and state income tax cuts, big industry is also benefiting from a major electric rate changes in Michigan.  Yes, there is a cost of service difference between big and small electric users.

However, the above statistics and trends suggest a couple of questions: 

Are Michigan’s rates fair and are those least able to pay subsidizing other electric users?