Effective May 1, Consumers Energy announced they would move to a $1,300 per house flat fee for electric installations (curb to home). This change was approved by the Michigan Public Service Commission (MPSC) as part of Consumers Energy’s most recent rate case. 

When made aware of this move, your state association investigated and reviewed the MPSC testimony given by Consumers Energy in this case. In that testimony, Consumers argued that there has not been an increase in connection fees of this sort since 1993. They then explained that their average distance to connect a home over the past three years was 132 feet and that their costs have risen to $9.93 per foot. Multiplying these numbers, they said it would make things simpler and more predictable if they charged a flat $1,300 fee for each residential connection. 

The MPSC agreed to this calculation, apparently without much thoughtful analysis. The numbers provided by Consumers Energy included ALL connections, including for those very large homes that could be thousands of feet from the curb. The typical home built today is between 30 to 40 feet from the curb. Distances for workforce and more attainable housing developments are even shorter. HBAM’s take on this change was that for most homes, this flat fee would result in a charge that was roughly $1,000 more than what it costs Consumers Energy to bring them electric service. 

We know that for every $1,000 increase in housing costs, you eliminate nearly 5,000 Michigan households from being able to afford the purchase of a home. HBAM shared these concerns with Consumers Energy and made it clear that it opposes this new fee structure and that HBAM believes it constitutes a tax on new housing production. 

After a number of meetings and communications, Consumers Energy better understood our concerns and, at the time this issue of Michigan Builder was published, agreed to ask the MPSC to modify their connection fee charges and base it on their per foot cost. A communication to members will be made as soon as this request is acted upon by the MPSC.