Consumers Energy Rate Hike Sparks Major Pushback from AG Nessel

Michigan’s attorney general challenges a steep $248 million natural gas rate hike, calling most of the increase unjustified and unfair to residents.

Michigan AG Nessel Calls Out “Unjustified” Utility Price Hike

LANSING — Issued by the Michigan Public Service Commission at 3:00 p.m. on April 24, 2025

Michigan Attorney General Dana Nessel is urging state regulators to significantly reduce Consumers Energy’s proposed $248 million rate hike for natural gas services, arguing that nearly 70% of the increase is unwarranted.

In testimony submitted to the Michigan Public Service Commission (MPSC), Nessel recommended scaling back the increase to $76.5 million—a proposal that would amount to a 3.5% overall rise instead of the 12% spike sought by the utility.

“In this case, our review found that about 70% of Consumers Energy’s proposed rate hike is unjustified,” said Attorney General Nessel. “They are attempting to inflate their request by including unwarranted expenses… all on the backs of the Michigan ratepayers trapped in their monopoly.”

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Consumers Energy Rate Hike Raises Affordability Concerns

Consumers Energy, which supplies natural gas to roughly 1.8 million Michigan customers, filed its request for a $248 million annual increase in natural gas rates—only five months after receiving approval for a $35 million rate hike.

Beyond the base increase, Consumers is also seeking higher profit margins on certain expenses and a 33% hike in monthly service fees for residential and small business customers. These proposals come on top of previously approved increases of 10% for residential and 13% for small commercial customers in the last rate case.

Nessel’s office says these proposals would unfairly burden ratepayers, many of whom have limited options due to the utility’s monopolistic market position.

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Nessel’s Office Seeks Long-Term Reform of Utility Rate System

Since taking office, Attorney General Nessel has intervened in multiple utility rate cases, helping Michigan consumers save more than $3.7 billion, according to her office. She argues that Consumers and DTE Energy have made a habit of submitting excessive rate hike requests padded with unjustified expenses.

“This cycle of rate hike after rate hike needs to end,” Nessel said. “More must be done to tell Consumers Energy and DTE their annual attempts to pass crooked costs onto our residents are unacceptable.”

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More Utility Rate Hikes Loom as Public Scrutiny Grows

The MPSC is also expected to receive an electric rate hike request from DTE Energy this week. Consumers Energy has already announced a separate electric rate hike as well. These pending cases could compound cost pressures on Michigan households already facing inflation and rising utility bills.

Energy justice advocates have long pushed for increased transparency and customer protections in utility pricing decisions. Dr. Tony Reames, a University of Michigan professor specializing in energy equity, says utility rate structures often disproportionately affect low-income and rural households.

“[Energy poverty] is separate from general poverty, because you can address it with some physical improvements. By improving the physical condition of a home, you can reduce the energy consumption and hopefully make energy more affordable.”?Resources for the Future

You can listen to the full interview here: Resources Radio Podcast with Tony Reames

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Ratepayer Impacts Could Be Significant Without Revisions

If the full request is approved, the average residential customer could see annual bills rise by more than $130. The impact on small commercial users could be even higher.

For now, MPSC regulators will review the AG’s testimony and Consumers Energy’s filings before issuing a decision. The case number is U-21540 and is available for public review on the MPSC’s e-docket system.

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