Michigan residential electricity rates are high compared to the national average and other Midwestern states, according to the Michigan Public Service Commission and other industry trackers.
In April, the state's largest two electric utilities, DTE Energy and Consumers Energy, announced they planned to hike their rates further.
Utility companies in Michigan operate under a regulated monopoly, which means they have to get their rate approved by the state public service commission.
Commission spokesperson Matt Helms said part of why the commission allows utilities to set higher rates is that the state's electricity usage is lower than some of its neighbors.
“A significant reason Michigan’s residential electric rates are higher than other states is that Michigan residents use less electricity per month than other states where residents use more electricity for home air conditioning and heating," Helms said.
That means Michiganders' electricity bills might be lower than in neighboring states, even though the cost per kilowatt-hour is higher in Michigan.
“Michigan’s cooler temperatures mean residential customers use less electricity for air conditioning, and around 75% of Michigan households are heated with natural gas, not electric heat,” Helms explained.
Ryan Lowry, a spokesman for DTE, said in a statement that “DTE’s customers (and Michiganders in general) end up using less energy than most other utility customers across the country, and therefore have higher than average rates" but lower-than-average costs per household.
The average residential electric bill in Michigan was $113.62 per month in 2023, well below the national average of $136.84, and within the middle range of nearby Midwest states, according to Energy Information Administration data.
Brian Wheeler, a spokesman for Consumers Energy, said, “our residential customers’ electric bills are below the Midwest and national average, which reflects the powerful impact of our energy-saving programs, incentives and actions that keep bills lower.”
“Our energy efficiency programs have helped customers save over $7 billion on their bills since 2009,” he continued. “Consumers Energy also is working every day to connect people with help to pay bills."
Lowry, the DTE spokesperson, said his company's rates have been going up slowly, and the increases fund improvements in service. "DTE bills have only grown by 2.4% over the past five years because of our strong focus on controlling our costs and efficiently operating our power plants,” he said. “DTE is a top performer nationally when it comes to keeping bills low for our customers.”
Lowry said DTE has built a stronger electric grid which, coupled with less extreme weather last year, led to a nearly 30% decrease in the number of outages customers experienced and a 70% decrease in outage duration in 2024, compared to 2023.
“We are also accelerating our clean energy transformation, allowing DTE to meet our net zero decarbonization goal and the state of Michigan’s clean energy mandate,” he said.
Nick Dodge, the communications director for the Michigan League of Conservation Voters, said his group's work includes holding utility companies accountable for the growing issue of rising energy costs and poor reliability.
The utility companies' leaders also donate to lawmakers in the Michigan Legislature, the same lawmakers responsible for passing laws that dictate how the utility companies operate, said Dodge, adding that this creates a major obstacle for reform.
In the interest of transparency, the Michigan League of Conservation Voters have launched a scorecard that shows the contributions of utility companies to elected officials.
The organization has challenged lawmakers to say decline utility money. According to Dodge, a group of around 25 elected officials have accepted the challenge.
In a statement, Michigan Attorney General Dana Nessel weighed in on the state policy that allows utility companies to file rate hike requests every 12 months.
“They’re back asking for more money before anybody knows if their proposed investments made any difference in reliability or affordability for customers,” Nessel said. Her office often intervenes in utility rate cases that go before the public service commission, and Nessel said those interventions have saved Michigan consumers more than $3.7 billion in total.
Editor's note: Consumers Energy and DTE Energy are among Michigan Public's corporate sponsors.
