Michigan utility rate hikes pressure West Michigan families as gubernatorial candidate promises grid reform

A typical West Michigan household using 500 kilowatt-hours of electricity per month will see its monthly bill increase by $6.46, or 6.1 percent, starting May 1, 2026.

That is the impact of a $276.6 million rate hike approved by the Michigan Public Service Commission for Consumers Energy last month.

The increase is part of the utility's Reliability Action Plan, which includes efforts to bury powerlines and install poles that can withstand stronger winds, storms and other severe weather.

"We're paying these skyrocketing bills and we don't know where all this money is going," said Secretary of State Jocelyn Benson during a news conference in Saginaw. "Is it going to eliminate these outages and modernize our grid? Or is it just going to increase the profits of corporations and CEO's?"

Benson, who currently oversees Michigan's campaign finance system, is running for governor against Genesee County Sheriff Chris Swanson, former Cape Coral Florida Mayor Marni Sawicki, and biochemist Kevin Hogan.

The Numbers Behind the Bills

Consumers Energy had originally requested a rate increase of $423 million, but the commission approved significantly less after cutting out projects that were not fully supported or shown to be prudent investments.

The commission removed almost 40 percent of the company's original proposed request.

The approval includes:

• $226 million for the utility's Lines Reliability Low-Voltage Distribution program
• Funding for Resiliency Fractionalization improvements
• System Protection upgrades targeting reductions in interruptions
• $21.7 million in deferral costs for tree-trimming operations
• $14.6 million for cloud computing costs associated with the company's SAP S4/HANA information technology project

Consumers Senior Vice President of Regulatory and Legal Affairs Kelly Hall said during a press conference that monthly bills could grow by an average of $6.46 for residential customers.

The Regulatory Process

The Michigan Public Service Commission maintained the company's current return on common equity of 9.9 percent and a capital structure of 50 percent equity and 50 percent debt.

The utility had sought a return on equity of 10.25 percent and a capital structure of 50.75 percent equity and 49.25 percent debt.

"We know that Michiganders are experiencing the cost of everything increasing — from groceries, to housing, to gas prices," said Consumers director of media relations Katie Carey. "We will work with any future administration and Legislature on achieving these goals."

DTE Energy, which also serves parts of West Michigan, issued a statement struck a similar neutral tone: "We recognize that affordability remains a critical concern for the families and businesses we serve. While DTE Energy's electric bills have remained below regional and national averages, we are mindful of the impact any increase can have on our customers and continue to look for ways to manage costs responsibly."

Political Response

Benson unveiled her energy plan as part of a broader plan to address energy costs for Michigan residents. Her proposal includes placing limits on political contributions utilities can make.

The proposal from Benson could limit political spending by DTE Energy and Consumers Energy. Benson received contributions from utilities in past cycles but said she has not accepted funds from them for her current campaign.

In the last legislative session, DTE or Consumers-affiliated PACs gave to 120 of 148 legislators' campaigns or leadership funds, nearly $560,000 over two years. The contributions were bipartisan and almost evenly split between lawmakers and related leadership PACs from both major political parties.

At least 22 other states across the country have introduced or adopted proposals to limit investor-owned utilities' political activities, according to the Energy and Policy Institute.

Benson's plan also aims to tie utility profits to service reliability, as well as increasing outage credits available to ratepayers.

She called for additional reforms to the rate-setting process handled by the Michigan Public Service Commission.

Benson also advocated for a grid audit to identify weaknesses and infrastructure needs in the state's power supply, as well as a statewide home energy bills relief program to assist Michigan residents with weatherizing homes, upgrading insulation, replacing outdated heating and cooling systems and expanding flexible payment plan options.

Grid Performance

The commission's focus on reliability comes as Michigan reduced the average number of outage minutes per customer by nearly an hour — 52.6 minutes — between 2019 and 2024, a greater reduction than any other state.

Consumers Energy's average customer experienced 21 fewer power outage minutes in 2024 compared to 2023. More than 93 percent of its customers experiencing power outages had their power restored in less than 24 hours in 2024 in all weather conditions, up from 87 percent in 2023.

Benson said her ultimate goal is to protect residents from higher heating and electricity costs and frequent, widespread outages.

"We're going to end the conflict of interest so that companies seeking to raise rates cannot influence making those rules and decisions that are meant to regulate them," Benson said.

Critics of similar efforts to curb utilities' political influence, including the Michigan Chamber of Commerce, contend that doing so would be an unconstitutional restriction on free speech.

Benson said her proposal is not an endorsement of an ongoing Michigan petition drive that seeks to ban political spending by utilities or state government contractors. As secretary of state, Benson can't weigh in on pending initiatives, which are reviewed by her office to determine if they qualify for the ballot.

The Bottom Line

The new rates are set to take effect May 1, 2026. For West Michigan families already struggling with rising costs across groceries, housing, and gas prices, a 6.1 percent increase on their monthly electric bill adds to the financial pressure.

Benson's Democratic primary for governor is scheduled for August 4, 2026.