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Cities successfully challenge DTE Energy over LED streetlight costs

flickr http://michrad.io/1LXrdJM

A group of cities has successfully challenged DTE Energy’s plan to charge it more for LED streetlights.

A coalition of cities took its case against DTE’s proposed rate change to the Michigan Public Service Commission.

DTE claimed that it was merely adjusting prices as it “gains more experience” with LED technology.

That angered cities that had installed LED streetlighting, which is more energy-efficient than traditional lighting, but also more expensive upfront.

Rick Bunch, executive director of the Southeast Michigan Regional Energy Office, said DTE’s plan would have been a big setback for cities that had invested in LEDs expecting to save money in the long run.

But “[DTE] proposed to heighten the rates for LEDs pretty significantly, while dropping the rates for an older technology that uses even more energy,” Bunch said.

Twenty-one local governments joined forces to intervene in the rate case before the Public Service Commission. The MPSC found in the cities’ favor last week.

Bunch says the Commission agreed that DTE couldn’t justify its plan on a cost-covering basis. “It became clear that rather than basing its proposed rates on actual costs, DTE was basing them on a revenue target,” Bunch said.

The MPSC said it would convene a process where the two sides work out a new rate structure together within 90 days.

Bunch said that was what the cities wanted all along, and informal discussions are already under way. “We need to have a dialogue with DTE to establish a vision for where we’re going with this technology over the next couple of decades,” he said.

DTE spokesman Scott Simon said in an email that the utility “believes the order intended an equal percentage increase for various types of street lighting,” and is now evaluating its options.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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