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A proposed $436 million rate hike from Consumers Energy could increase household electric bills in Michigan by 13%—marking the steepest rise in decades. The proposal comes just two months after the Michigan Public Service Commission (MPSC) approved a separate $154 million increase.
But not everyone is convinced. Michigan Attorney General Dana Nessel is pushing back, calling the proposal “corporate greed” and filing a notice of intervention with the MPSC, which has the final say on whether the hike will move forward.
Consumers Energy says the new funding is critical to improving reliability for the 2 million-plus homes and businesses it serves, particularly as severe and catastrophic weather becomes more common.
“We are following our Reliability Roadmap to ensure that power outages are shorter and less common, even in the face of more severe, catastrophic storms,” Katelyn Carey, director of external relations for Consumers Energy, said in an email.
“Our request to the MPSC is part of that plan, proposing major investments in line clearing and technology across all communities we serve to support our long-term goal that no customer will go more than 24 hours without power,” she added.
So, what does this mean for Michigan homeowners—and how can they prepare for higher energy costs ahead?
What’s in the rate proposal—and why it’s so controversial
Consumers Energy’s proposed $436 million rate increase would raise residential electric bills by an estimated $6 to $12 per month, depending on usage. That’s up to $144 more per year for the average household.
While the increase might seem modest month to month, those costs can quietly stack up, especially when combined with rising insurance premiums, food prices, and property taxes.
Critics of the hike, including Nessel, argue that the utility is asking for too much, too soon, without demonstrating clear results from the last approved hike.
“They are pricing customers out of the market,” Nessel said in an interview with WDIV 4 Click on Detroit. “We already have people who call us and email us on a daily basis to say, ‘I can’t afford to pay my electric bill now. I’m certainly not going to be able to afford it in the event there is another increase.’”
Nessel’s office is urging the MPSC to scrutinize the proposal closely, arguing that any approved rate hikes must directly benefit customers. A recent press release from her office criticizes past rate filings that included expenses such as private jet travel for executives and other costs unrelated to service improvements.
Can the state stop it? The role of the Michigan Public Service Commission
So, what power does the state have to stop the hike?
The Michigan Public Service Commission is the regulatory body that oversees electric and natural gas utilities in the state, including Consumers Energy. Any proposed rate increase must go through the MPSC’s formal review process, where the utility is required to justify the hike with data, expert testimony, and projected outcomes.
Nessel has filed a notice of intervention with the MPSC—a formal move that allows her office to participate in the case, present evidence, and challenge the utility’s claims.
But while Nessel can argue against the hike, she cannot block it outright. That decision lies solely with the MPSC, which has the final authority to approve, modify, or deny the proposal based on the evidence presented.
Why energy costs are rising in Michigan
In the Detroit metro area, the average price of electricity per kilowatt-hour has risen 25% since 2020, according to data from the Federal Reserve Bank of St. Louis. Nationally, electricity prices are up 4.5%, almost twice the 2.4% national inflation rate, according to data from the Bureau of Labor Statistics.
Several factors are driving these increases: Inflation has pushed up the cost of materials and labor, while volatile fuel prices have made energy production in some places more expensive. Utilities are also investing heavily in climate resilience, upgrading infrastructure to withstand more frequent and severe storms.
That’s part of what necessitates the rate hike in Michigan, explained Carey.
“Our Reliability Roadmap goals … are to provide reliable electric service to customers that rates better than the average among our industry peers while working toward two long-term goals: 1. Restore power to all customers in 24 hours, and 2. No storm will cause more than 100,000 customers to lose power,” she said in the email.
In Michigan specifically, additional pressures are at play. The state’s aging electrical grid requires significant upgrades, and demand for service is growing as both population centers and energy needs expand.
Utilities like Consumers Energy are under increasing pressure to modernize systems and reduce outage times—costs that are now being passed on to ratepayers.
How a 13% increase could hit homeowners hard
A 13% increase could mean $144 or more per year for some Michigan households, which is enough to tip the balance for families already struggling with rising living costs. While some might be able to absorb the monthly increase, low- and fixed-income residents could find it unmanageable.
“I can never predict what the Public Services Commission is going to do, just like I can never predict what any judge is going to do,” Nessel said in her interview with WDIV. “All I can do is try my hardest and be the best advocate I can be and present the best case to the Michigan Public Service Commission that we can as to why this rate increase is unwarranted.”
Consumers Energy, meanwhile, maintains that equity remains a core part of its mission.
“Last year, 137,000 families across 30 Michigan counties received energy assistance,” said Carey. “We’re committed to fair and equitable access to energy for everyone in our service area, especially those in our most vulnerable communities. ”
As the legal and political battle unfolds, the stakes are high: Will advocates succeed in scaling back the hike, or will Michigan residents be forced to absorb yet another blow to their monthly budgets?