By DREYMA BERONJA

Journal Staff Writer

MARQUETTE — The Michigan Public Service Commission has approved a settlement in Upper Peninsula Power Company’s rate increase request.

The settlement secured a 60% reduction, low-income customer affordability funds and a fixed-term moratorium on future rate increases from UPPCO’s initial seeking of a $25.3 million increase in electric rates, according to a press release sent from Michigan Attorney General Dana Nessel.

“With this settlement we’ve secured significant savings and support for ratepayers across the Upper Peninsula,” Nessel said. “This settlement greatly reduces the utility company’s rate increase request as well as creates and funds assistance for many customers struggling to pay their energy bills.”

The settlement is 60% less than UPPCO’s original request. She said UPPCO’s request would have raised residential customer rates by over 25% and increased the monthly customer charge from $15 to $29.

After working with the Citizens Utility Board of Michigan and MPSC staff, the terms of the settlement secured by Nessel are:

≤ a nearly 60% reduction of the requested rate increase, generating $10.8 million in utility revenue, down from the $25.3 million sought;

≤ the elimination of a proposed $14-per-month increase to the customer charge;

≤ a moratorium preventing any future rate increases until 2025;

≤ a donation from UPPCO of $200,000 to assist low-income customers with bill affordability;

≤ the creation of a residential income assistant program that provides a $15 credit to the customer’s bill;

≤ and increase in the distributed generation cap from 3% to 4.5%.

“UPPCO’s base rates haven’t increased since the company’s last rate review case was approved by the MPSC nearly four years ago,” UPPCO Vice President of Business Development and Communications Brett French said in an UPPCO press release. “During that time, UPPCO has successfully contained costs while making significant investments that improve upon customer service and increase the reliability and resiliency of its distribution system.”

According to UPPCO’s press release, under the approved settlement, the monthly bill for a residential customer who consumes 500 kilowatt hours of energy will increase from $121.08 to $133.38, an increase of $12.30, or 10.1%.

“When compared against the rate of inflation over the past four years, this increase is actually lower than the compounded rate of inflation — a testament to the company’s ongoing efforts to contain costs and deliver exceptional value to the customers we serve,” French said.

The new rates will go into effect beginning July 1, according to UPPCO’s press release.

For more information, visit uppco.com.

Dreyma Beronja can be reached at 906-228-2500 ext. 248. Their email address is dberonj@miningjournal.net.