Summary
CMS Energy Corporation (CMS) disclosed via an 8-K filing on May 31, 2011, that its subsidiary, Consumers Energy Company, received approval from the Michigan Public Service Commission (MPSC) for a partial settlement in its gas rate case. This settlement will result in an approximate $31.4 million annual increase in natural gas rates, effective May 27, 2011. The MPSC's decision includes a 10.5% rate of return on common equity and outlines several conditions and requirements for Consumers Energy, such as conducting studies on lost and unaccounted-for gas and filing cost of service studies with a historical peak day approach in its next rate case. The settlement also addresses specific program parameters, including maintaining the gas-in-kind percentage for transportation customers at 1.83% and modifying the Gas Customer Choice program for increased flexibility. A $500,000 trust for worker training was established, and accounting authorizations for asbestos abatement and pipe maintenance were granted. Key issues remaining for MPSC determination include advanced metering infrastructure, contributions to energy efficiency funds, and a decoupling mechanism.
Key Highlights
- 1MPSC approved a partial settlement in Consumers Energy's gas rate case, effective May 27, 2011.
- 2Annual increase in natural gas rates is approximately $31.4 million.
- 3Approved rate of return on common equity set at 10.5%.
- 4Consumers Energy required to conduct studies on reducing lost and unaccounted-for gas.
- 5Future rate case filings must include a cost of service study using a historical peak day approach.
- 6Gas-in-kind percentage for end-user transportation customers to remain at 1.83%.
- 7A $500,000 trust for worker training has been established.