Mixed results for UPPCO customers in MPSC ruling

MARQUETTE — Many residential customers who get electric service from the Upper Peninsula Power Co. are expected to benefit from slightly lower rates following a Michigan Public Service Commission ruling announced Thursday.

About 40,000 residential customers will see a savings of 1.55%, or $1.76 per billing period, for those who use 500 kilowatt-hours per month, an MPSC press release states.

About 3,300 customers who live in Iron River, Stambaugh, Caspian, Gaastra, Mineral Hills and the surrounding areas will see an increase of 2.3%, or $2.51 per month for those who use 500 kilowatt-hours.

The rates were adjusted as a result of the company combining its two residential rate schedules and eliminating its Iron River District, the release states.

All rate adjustments are expected to begin with customer’s June bill cycle.

The company’s initial filing requested a nearly $10 million rate increase. The $1.8 million MPSC settlement is just 18% of that initial request.

While base rates for residential customers are expected to decrease up to 5.18% as a result of the filing, commercial rates will rise by 14.1% and industrial rates will see an increase of 9.34%. Overall, rates are 1.97% higher than those approved in September 2016.

“In UPPCO’s rate application, the utility proposed rebalancing costs between residential and business customers, which benefits U.P. families,” the MPSC release states.

UPPCO, in its own release on Thursday, said the settlement “adjusts the rates being charged to all customers to reflect cost of service, returns the full benefit of the Federal Tax Cuts Jobs Act of 2017, captures cost reductions achieved by UPPCO for energy purchases, recovers investments being made in the Smart Energy advanced metering infrastructure project and increases the cap for customer-owned generation to 2%.”

Despite the increases to industrial and commercial customers, UPPCO Vice President of Business Development and Communications Brett French, in the company release, said the new rates are still lower than those approved by the MPSC in 2014.

“Overall, these reductions reflect the company’s continued efforts to stabilize rates and provide increased value to our customers,” French said.

Michigan Attorney General Dana Nessel, Calumet Electronics Corp., Verso Corp., Energy Michigan Inc., the Association of Businesses Advocating Tariff Equity and Citizens Against Rate Excess were all party to the agreement, which was signed May 6.

The settlement also requires UPPCO to spend at least $4.9 million on advanced metering infrastructure to increase meter-reading accuracy as well as operational efficiencies, the MPSC release states. If the company spends less than the agreed-upon amount, the difference will be refunded to customers.

The company on Sept. 24 announced the launch of its “advanced metering solution,” which will allow UPPCO to read and control customer meters remotely — eliminating the need for bi-monthly meter reads and estimated bills.

According to that communication, smart meter installation was expected to begin this spring and would take more than a year to complete. UPPCO officials could not be reached by press time to determine the status of the project.

The settlement includes a non-standard meter provision, which allows customers to “opt out” of the radio-controlled meters for an initial fee of $62.25. The company will also charge $14.26 per month for those customers who choose to opt out of the smart meter program.

Several public comments relating to health concerns surrounding the use of the radio-controlled meters and frustration over the cost to opt out of the program were submitted to the MPSC prior to its ruling.

Lisa Bowers can be reached at 906-228-2500, ext. 242. Her email address is lbowers@miningjournal.net.