Based on a DTE Energy monthly bill, submitted by a reader who wishes to remain anonymous, The Oakland Press contacted DTE with the idea of dissecting the statement and obtaining an explanation for those plentiful surcharges.
Total charges for the sample month, in this case December, were $94.10. But of that total, just a little more than 50 percent, $47.84, was for actual electricity use. The balance of the fees were surcharges.
Scott Simons, spokesman for DTE, says this charge offsets the cost of the company’s efforts to harness solar and wind power. He notes the state has mandated that by 2015, 10 percent of the DTE’s capacity come cheap jerseys from renewable energy sources. Currently, Simons says, DTE’s wind farm is providing 14 megawatts of power through the use of seven turbine generators.
While that doesn’t seem like much compared to the total capacity of DTE facilities, which is 11,000 megawatts of electricity at any given time, Simons notes “you have to start somewhere.”
In the only surcharge that consumers would probably like, there was a $4.89 rebate for “power supply cost recovery, regulatory asset recovery and enhanced security.” However, don’t get too excited. All of these basically are a refund of fees previously paid by customers because the costs of recovering or buying the fuel to generate energy were less than anticipated.
Then, there are a number of fees under the category of “delivery charges.”
There’s a $6 service charge fee that covers the cost of meter operation and reading.
DTE charged $24.72 for distribution, which, as the name implies, covers the costs of delivering the power, such as through power lines.
A 75 cent “energy optimization” surcharge is state mandated and covers the cost of energy efficiency programs. Simons says this basically ordered DTE to develop a variety of programs for its customers to become more energy efficient and the state is allowing DTE to recover those costs.
“We’re the energy experts so it makes sense for us to administer those programs,” he says. “To help us administer those programs, we contract with a number of suppliers and firms that offer these services. It is another job generator as well.
“Hopefully, our customers will take advantage of all these programs and save money on their energy bills.” The programs include selling energy efficient light bulbs, which last 10 times as long as the traditional filament ones.
There are four charges under “other delivery surcharges” that total $13.05 on the sample bill.
One is “nuclear decommissioning,” a charge the state has mandated that allows DTE to charge customers for when a nuclear plant is taken out of service. Simons says this money is currently being placed in a fund to be tapped later.
The “choice implementation” surcharge also mandated by the state allows DTE to recover from existing customers the cost of customers who go to other electrical suppliers.
Then there’s “securitzation bond and bond tax” charges, which reimburses DTE for its refinancing of debt from its Fermi II nuclear plant in Newport, near Monroe.
Finally, there’s the “U 15768 implementation” surcharge, which allows DTE to immediately self implement a portion or all of a rate increase request submitted to the Michigan Public Service Commission. Simons says the Legislature allows DTE to start billing at the higher rates with understanding that if the rate increase is rejected or reduced by the PSC, customers would get a rebate.
As Simons notes, “All of these charges are reviewed and approved by the Michigan Public Service Commission. In 2009, we reduced our costs by more than $100 million because we knew the economy and higher costs for us would have to be offset for us and we did that without layoffs.”
It may not come as a lot of comfort to customers, but realizing what and why these surcharges are being assessed may help explain why your electricity usage may be down from last year because you’re trying to save energy but your total bill is up. One reader reported that his year to year monthly usage dropped 19 percent. But, he saw only a 5 percent drop in the monthly bill.
The “distribution charges” of $27.77 pay for the pipelines, transmission systems and the storage fields that Bishop says “we use to provide you with safe and reliable natural gas service.” He notes Consumers has one of the largest natural gas storage systems in the nation, primarily in the Detroit area, and that helps keep total costs down.
The largest portion of the bill, $110.23, is the “gas cost recovery charge (GCR),” which Bishop says pays for the fuel itself or the cost of the gas. Under state regulations, Consumers doesn’t make any money on cost of the fuel. “What we pay is what we charge our customers,” Bishop says.
Bishop notes that because of the fluctuating price of natural gas, customer bills may rise or fall from year to year, but because of the utility’s large storage facilities, increases are minimized. This year, he notes, because natural gas prices have fallen, customers should get a break.
Both DTE and Consumers are for profit companies and have stockholders they must report to. However, as utilities in Michigan, in addition to facing costly state regulations, they do get special privileges. Both are allowed to have profit margins of 10 to 12 percent a year, and may increase their rates to achieve those numbers. That’s not bad when inflation is only 2 or 3 percent and many companies are struggling to break even.
Also, they are guaranteed a 90 percent share of the market. Competing companies are allowed to take a total of no more than 10 percent of their customers.
To be fair, both utilities do have programs where they try http://www.cheapjerseys11.com/ to keep costs down and optimize their operations.
Cheap energy is a thing of the past. But because the utilities have state mandated controls and are supervised by the PSC, they must be more open to the public in their operation.
Customers obviously don’t have to educate themselves about their energy bills and the companies that supply their heat and electricity. But the information is available, should they want to.