AG Helps Save DTE Customers Nearly $13 Million

LANSING — The Michigan Public Service Commission (MPSC) denied in full a request from DTE Electric Company to implement an expensive prepay program and to rescind certain customer protections.  In its order, the MPSC cited extensively the Department of Attorney General’s argument and noted that the Department’s involvement in the case was key to its determination, Attorney General Dana Nessel announced today.

In case No. U-21087 before the MPSC, DTE Electric sought permission to start a prepay program, through which ratepayers could pay for electricity usage before actually consuming that energy, as opposed to the traditional “postpay” model.  To implement the program, DTE also asked to suspend certain billing rules, which serve as customer protections.

After intervening in the case, the Department of Attorney General closely examined DTE’s proposal and how it would affect customers.  Along with other consumer advocates, the department pointed out the many flaws with the program, including:

• DTE previously conducted a prepay pilot program that was unpopular and saw almost all participants leave.
• DTE wanted to spread the program costs out across its entire customer base, while only those who enrolled in the program would actually benefit.
• Within the program, DTE would have had the ability to more quickly disconnect customers for late payments, without the built-in safeguards guaranteed by the billing rules.
• The lack of detail on any benefits customers would receive in return for paying $12.6 million to get the program started.
• Unspecified costs to keep the program running.
• The fact that DTE discussed the costs of the case in a separate docket, making a proper cost-benefit analysis impossible.

“While programs such as DTE’s prepay proposal may appear harmless on their face, it is important to understand how the program is structured, what protections ratepayers are being asked to forfeit, how much the program will cost, and who will ultimately pay for the program,” said Nessel.  “My department is vigilant in examining the cases presented to the MPSC to ensure the interests of ratepayers are fully and adequately considered.  The structure and costs associated with this program were a bad deal for consumers, especially lower-income customers who might have found themselves forced into the program.  I appreciate the MPSC’s attention to the very real risks for customers in this case.  This is a big win for ratepayers.”