Michigan rejects DTE proposal to start prepayment program because of risk to lower-income customers

In what she called a “big win” for customers, Attorney General Dana Nessel successfully fought against a $12.6 million proposal by DTE Electric Company to allow customers to prepay their electric bills.

The Michigan Public Service Commission ultimately shot down the proposal after Nessel’s office intervened and said the voluntary plan would diminish consumer protections.

Under the proposal, electric customers would have been able to join a program to pay their bill a month earlier, before they used their energy.

But Nessel argued the proposal would be bad for lower-income customers because it would have enabled DTE to disconnect their service faster if they failed to pay.

“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,” Nessel said in a statement. “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.”

Nessel said DTE previously conducted a prepay pilot program that was “was unpopular and saw almost all participants leave.” In addition, the cost of the proposal – $12.6 million – would have been spread to all customers, not just those who use it.

In November, the Michigan Public Service Commission approved a $30.5 million increase for DTE Electric, which was less than 10% of the utility’s request.

DTE Energy, the parent company of DTE Electric, and its executives and lobbyists have donated to the campaigns of nearly every state lawmaker in Michigan.

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