Michigan Cost Recovery is approved; June billing is approved up to $5.8092 /Mcf

In a contested case, Consumers Energy Company (Consumers) has been approved to recover the costs associated with this winter’s extreme cold including the effect of the polar vortex.

Starting in June 2014, Consumers, will be allowed to recover their winter costs, which exceed $185,000,000.

The cost recovery was contested because Michigan utilities are, under normal conditions, required to submit their costs only once a year each December to cover their costs for the coming year. However, the winter costs accelerated sharply in January, February, and March 2014. Instead of sitting on these costs and paying interest, Consumers requested the Michigan Public Utility Commission (MPSC) to approve the recovery of these costs due to the extraordinary amount that would have to be carried for 12 months. Consumers, like all Michigan utilities, borrows money and repays it, thereby paying interest until the loan is repaid.

With this decision settled, it is expected that the other Michigan utilities will submit their winter costs and begin recovering them rather than waiting until next year and thereby increasing the cost to be recovered.


The Commission decision in whole is below;