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Proposed DTE rate increase could further stress low-income customers

Tracy Samilton
Michigan Radio

Margaret Lewis is a retired court reporter who lives in a big, older home in Highland Park -- the kind you say has "good bones," because it needs some work. 

She's on a fixed income, and she's done just about everything she can think of to lower her utility bills. 

One winter she even turned the thermostat down to 50 degrees.

"Then when it got really, really cold, the house could not reach that degree to keep the pipes from freezing," says Lewis.

You can still see the ceiling damage from the burst pipes. 

Lewis has since turned up the heat to 58, and moved a little bed into her living room, closing it off from the rest of the house. She points to a space heater at her feet.

"See, I can use this little heater, and keep this one room comfortable."

Last year, Soulardarity, a Highland Park energy advocacy group, came in and sealed all the leaks and put plastic sheeting on the windows. 

Lewis says her bills went down. But she figures that's temporary, because DTE is planning to raise its rates again.  

"The energy company gets to raise its rates and eat up the savings, and I think that's so wrong," she says.

Some people are even worse off than Lewis. 

According to the U.S. Census, more than 284,000 households in Michigan have incomes below 50% of the federal poverty level.

Energy bills take nearly a third of their income, and utility assistance for the poor, including money that utilities like DTE kick in, doesn't come close to making energy affordable.

Don Stanczak is Vice President of Regulatory Affairs at DTE Energy.

"We don't raise rates unless we absolutely need to," he says. "And while we're very concerned and sensitive to rate increases, we also have an obligation to take care of our facilities. And that's really what these rate increases are about."

The proposed rate increase is about 2.4% for each of the next four years, for a total of about 9.6%.  

But it's worse than it seems, according to Don Keskey of the Public Law Resource Center. That's because rate increases snowball.

The Michigan Public Service Commission has approved six rate increases for DTE Energy since 2003, and only one rate decrease. 

"With each rate case, if you keep adding 5-9%, after four or five years, and four or five cases, you are rapidly increasing the cost burden upon the residential class," says Keskey.

According to the U.S. Energy Information Administration, Michigan already has the highest electric rates in the Midwest, and the 13th highest in the nation.

Keskey says electric bills are burdensome for everyone in the state, not just the poor. 

He recommends people take steps to lower their usage of electricity.  

That can run the gamut from replacing old appliances and planting shade trees, to bigger investments like heat pumps or super efficient insulation, to make a home more energy efficient.

He's also bullish on solar panels, pointing out the cost of installing solar panels has dramatically fallen in recent years.

But such investments are far beyond the means of people like Margaret Lewis. 

The small silver lining for customers at this point is, DTE Energy may not get all it has requested. An administrative law judge has recommended a much lower increase, closer to a 6% increase by 2022, instead of 9.6%.

The Michigan Public Service Commission is reviewing that recommendation and will make a final decision by early May.

Editor's note: DTE Energy is one of Michigan Radio's corporate sponsors.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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