DTE Energy Company (DTE - Free Report) filed a modified Renewable Energy Plan which includes the proposed reduction of monthly electric surcharges with the Michigan Public Service Commission ("MPSC").
DTE Energy intends to reduce the surcharge paid by residential customers by 86% from $3 to 43 cents. For the business classes, the proposed surcharges will also go down by 85%. For small-to-medium scale businesses, DTE Energy intends to cut surcharges from $4 to $16.58 per meter to 60 cents to $2.51 per meter. The large commercial and industrial houses will also witness a drop in surcharges to a range of $2.71 to $26.68 per meter from the current range of $16.58 to $187.50 per meter.
This translates into a $90 million decline per year in rates for all residential and commercial consumers. With the energy legislation passed in 2008, the company started implementing surcharges from 2009 to meet costs required to fulfill the state’s renewable generation target of 10% by 2015.
DTE Energy has labored to keep costs down in order to provide affordable electric services to its customers. The reduction in surcharges has also been helped by the extension of the production tax credits, which reined in operating costs. Also, constant technological upgrades provided DTE Energy the stimulus to expand its renewable portfolio, both wind and solar. This has led the company to clinch sizeable power purchase contracts.
The combination of these efforts placed DTE Energy as a frontrunner in clean energy services in Michigan. Besides the rate cuts, the company will carry on with its programs to attain the Renewable Portfolio Standards annually through 2029.
Currently, the mandate for the expected capacity generation is set at 950 MW, down from the prior 1,000 MW. DTE Energy is close to achieving the goal and has already realized 92% of it through various contracts and projects. In fact, the company has set aside $1.3 billion to achieve the renewable mandate of 10% of energy generation from renewables.
With renewable comsumption projected to rise 3.3% in the U.S., as per the Energy Information Administration (EIA), DTE Energy certainly looks well positioned in the energy industry. Currently the company holds a Zacks Rank #2 (Buy).
Also looking good are Zacks Ranked #2 (Buy) utilities ALLETE, Inc. (ALE - Free Report) , American Electric Power Company, Inc. (AEP - Free Report) and Entergy Corporation (ETR - Free Report) .
Based in Detroit, Mich. DTE Energy together with its subsidiaries engages in the generation, purchase, distribution, and sale of electricity.