LANSING, Mich. (Michigan News Source) – While governments are discussing banning gas stoves and other gas appliances, the Michigan Public Service Commission (MPSC), the state’s utility regulator, wants to ensure an efficient electric grid says Chair Dan Scripps. With demand increasing for electric vehicles in addition to needed electronics and appliances, and because Michigan is weaning the state off coal, one of the results of that demand is power companies charging customers more for their energy usage when they use it the most.
The Detroit News reported that starting in March, DTE Energy Co. residential electricity customers, two million of them, will be paying more for peak hours on weekdays which they define as 3 to 7 pm. They also report that using electricity during off-peak hours will cost everyone less than the current base rate. That is for usage before 3 pm, after 7 pm and on weekends.
The company says that the “time-of-use” rate from October to May is 16.75¢ per kilowatt hour for peak time and 15.45¢ per kilowatt hour for off-peak time. From June through September the cost is 20.98¢ per kilowatt hour for peak time and 15.45¢ per kilowatt hour for off-peak time.
DTE’s Chief Customer Officer Angie Pizzuti says that the rate change is about “giving customers choice and the ability to shift and save some of their usage in order to take advantage of lower rates.” For them, it helps flatten the peak in demand and spread electricity usage.
The rate changes will be applied to all customers, except commercial and industrial companies “at the direction of the Michigan Public Service Commission” says DTE.
A statement coming from the Michigan Public Service Commission says, “The goal of time-based pricing is to align utility rates with the actual costs of producing it at different times, in a revenue-neutral way (the utilities will not make additional profit off these rates), with the aim of reducing overall peak demand.”
With most people coming home from work and jumping back into their daily life routines between 3 and 7 pm, including making dinner, washing clothes, turning on the TV, using AC in the summer, getting on the computer and having kids do homework, the peak hour pricing is sure to be a windfall for DTE and other electric companies across the country who follow suit.
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Consumers Energy went down this road two years ago with residential consumers paying extra during their peak hours of 2 to 7 pm, netting the company about $5 extra per customer over four months. If the same is true for DTE, they will increase their profits by $10 million over the course of a year with the new time-of-use rates.
DTE is on track to shut down their coal plants by 2035 to shift away from fossil fuels and they plan to get to 51% renewables by that time. Their 2023 proposed fuel mix is 45% coal, 19% nuclear, 19% natural gas, 3% storage and 14% renewables. Their current renewable energy portfolio includes 19 wind parks and 32 solar farms located throughout the state of Michigan.
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