Citizens Against Rate Excess (CARE) announces that starting on or about March 19, 2016 retail customers of the Upper Peninsula Power Company (UPPCO) will likely begin to see their rates for electric service go up as a part of UPPCO’s plans to increase its utility rates by an annual amount of $6.3 million.
In September 2015, UPPCO filed an application with the Michigan Public Service Commission (Case No. U-17895) requesting the Commission to authorize the Company to raise its current rates. The rate increases expected to begin in March are the latest step in the general rate case proceeding pending before the Commission. In 2008, the Michigan Legislature passed a law permitting utilities 180 days after they apply for rate increases to self-implement up to the full amount of any rate increases a utility requests. The expected March increases are the result of this new procedure approved by the Legislature. Under this procedure, any self-implemented increase may be subject to refunds depending upon the final decision made by the Public Service Commission in each case.
CARE has intervened in this rate case to represent the interests of residential customers served by UPPCO. In February, 2016, UPPCO submitted testimony and exhibits indicating the Company plans to start $6.3 million in rate increases on March 19, 2016. CARE filed a brief requesting the Commission to delay self implementation because it was unclear whether the newly proposed surcharges accurately reflected the correct amounts for each of the customer classes being served by UPPCO. The Commission will be deciding that question before March 19th.
CARE also expressed concern about the ultimate result from the proposed rate increases because of information provided in UPPCO’s exhibit identifying its proposed surcharges. The surcharges will raise annual charges from approximately $103.9 million by $6.3 million to approximately $110.2 million.
Information provided in UPPCO’s exhibit has enabled CARE to calculate some very significant differences in the average annual cost of electricity that will be paid by customers in its different rate classes. The exhibit shows that the total average cost of electricity will range from a high of approximately 24.6 cents per kilowatt-hour for residential customers served under UPPCO’s Rate A-1 to a low of 0.0015 cents per kWh for customers served under Rate RTMP. During 2016, Rate A-1 customers are expected to use 208,444,256 kilowatt hours of electricity, and Rate RTMP customers are expected to use 240,890,130 kilowatt hours of electricity. A Rate Class A-1 is expected to use approximately 23% of the total electricity and to pay for approximately 46.5% of UPPCO’s total expenses. Rate Class RTMP is expected to use approximately 26.7% of the total electricity and to pay approximately 26.7% of UPPCO’s total expenses. UPPCO has 13 rate classes, and the total average costs for the other classes is between these high and the low amounts.
A review of the MPSC website reveals that UPPCO residential ratepayers are paying more than $40 per month more than the average statewide residential ratepayer of other utilities. That is nearly 70% higher than the statewide average.
For More Information See Links below:
Link to MPSC Data Comparing Monthly Bills and Rates per kWh
• Click on “Compare Monthly Bills” to view average monthly bills per utility statewide
• Click on “Compare Average Rates” to view average rates per utility in cents per kWh
Link to MPSC Case U-17895 Docket