Detroit-based DTE Energy will file an electric rate increase request with the Michigan Public Service Commission on Thursday for $456 million, which, if approved, would be about an $11 increase for the average monthly residential bill. The utility says the funds are needed to improve reliability.
The rate increase request, which was announced Wednesday at a roundtable interview with several members of the media, will go to making the grid "smarter," meaning it will install devices that can pinpoint more accurately and quickly locations of power outages. The utility said the devices will reduce power outages by 30% and cut outage time in half over the next five years.
"This case is incredibly important for us to continue to do the work we need to do to build a grid of the future, and continue to improve reliability in the state," Matt Paul, president and COO of DTE Electric, said.
The rate increase request comes about four months after the MPSC approved a $368.1 million electricity rate increase for DTE in December. The company had initially requested an increase of about $620 million, which was later adjusted downward to a little over $580 million.
Paul said pinpointing where the outages are, using the devices, will get crews to outages faster. The devices also allow DTE to reroute power when there is an outage, and they make the grid safer, automatically cutting power to a line that falls to the ground, for example.
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DTE is planning to install about 10,000 of the devices, which can cost up to $100,000 each, including the cost of installation.
He said another rate increase request is needed because "we have a lot of work to do."
"We have a vast system," Paul said. "It's aging, and the weather is getting worse and we have a lot of work to do to upgrade it."
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Paul said an increase, if approved, also would support DTE's plan to rebuild the oldest parts of its grid, building entire substations and circuits from scratch.
Another way to improve reliability is undergrounding, which Paul said is expensive. He said DTE is figuring out how to bring the costs down through its undergrounding pilot program in the Davison and Buffalo-Charles neighborhoods in Detroit.
“It seems like a really simple thing to do but it is expensive,” Trevor Lauer, vice chairman and group president for DTE Energy, said. “We need to make sure that all of the stakeholders agree with us that we should be undergrounding our system. Not everybody agrees with us that we should be undergrounding pieces of our system today.”
Another piece of the rate increase request would help fund clean energy projects that were approved in the integrated resource plan DTE Energy filed with the MPSC. One project is converting its coal-fired Belle River Power Plant in St. Clair County to natural gas.
Paul also said that DTE Energy is also getting the site of the Trenton Channel power plant smokestacks — which were demolished earlier this month — ready for a new project around energy storage.
“We're building a battery project there and we're really excited about it,” he said. “It's going to be a significant project.”
The rate filing kicks off about a 10-month process during which stakeholders provide feedback. Any increase would not go into effect until January 2025.
Contact Adrienne Roberts: amroberts@freepress.com.
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