Michigan Attorney General’s Office Negotiates Lower Energy Depreciation Rates

Michigan Attorney General Dana Nessel has entered into a settlement with Consumers Energy Company in its gas utility plant depreciation case which was approved by the Michigan Public Service Commission (MPSC) last week.

Consumers Energy filed a request to change its depreciation rates for its gas utility assets with the MPSC in December 2021. Its request included an annual decrease in depreciation expense of about $900,000 based on a study performed by the company. The Department of Attorney General determined that Consumers’ proposal did not reduce depreciation rates enough and that if approved, would result in ratepayers continuing to pay excessive depreciation expenses. The settlement agreement results in a reduction in annual depreciation expense of $29.26 million and saves gas customers $28 million more than the less than $1 million reduction proposed by the utility.

The new depreciation rates will be incorporated into rates in Consumers Energy’s next gas rate case, although a part of the change in depreciation rates related to renewable gas accounts will take effect immediately.