MPSC Approves Settlement Agreement Authorizing Michigan Gas Utilities Corporation to Increase Natural Gas Rates

Contact:  Judy Palnau, 517-241-3323
Agency:  Michigan Public Service Commission  

November 14, 2013
- The Michigan Public Service Commission (MPSC) today approved a settlement agreement authorizing Michigan Gas Utilities Corporation to increase its natural gas rates by $4,499,999, effective January 1, 2014.  

Residential customers using 100 ccf of natural gas a month will see an increase of 96 cents on their monthly bill.  

Michigan Gas Utilities Corporation on June 7 filed an application requesting a $8,036,820 rate increase. The final amount approved today ($4,499,999) is 44 percent below what the utility requested and represents an increase of 3.5 percent over the rates set in its last natural gas rate case (Case No. U-15990).

Under the terms of the settlement, the rate increase reflects an authorized return on common equity of 10.25 percent, resulting in an overall rate of return of 6.1484 percent. The uncollectibles expense tracking mechanism terminates with the close of business of the December billing month. The existing revenue decoupling mechanism (RDM) terminates on Dec. 31, and a new RDM will be implemented on Jan. 1, 2015. The utility will make capital expenditures that will reduce its overall system risk. This includes replacing the remaining 35 miles of bare steel main at a rate of at least four miles per year, beginning 2013, until all of the utility's bare steel main is replaced.

The utility and the MPSC staff participated in the settlement.

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

Case No. U-17273

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