Power Supply Cost Recovery factor increases: 0.10 to 0.258 cent per KWH

[Zacha341]

Well gasoline prices are down. But the 'Important Information' area at the bottom of my DTE Energy bill states the following [[in part): Beginning with the January 2015 cycle, the Power Supply Cost Recovery [[PSCR) factor will increase from 0.10 per kWh to 0.258 cent per kWh....

This looks like a over 50% increase pending! They offer some further verbiage that this increase is required for DTE to 'recover' purchased power expense... "billed to the customer without any profit or markup."

What are the politics and policy fueling this increase? Anyone read this 'Information' pg. 1 portion of their recent DTE Gas/ Electric bill???

[mwilbert]

Well gasoline prices are down. But the 'Important Information' area at the bottom of my DTE Energy bill states the following [[in part): Beginning with the January 2015 cycle, the Power Supply Cost Recovery [[PSCR) factor will increase from 0.10 per kWh to 0.258 cent per kWh....

This looks like a over 50% increase pending! They offer some further verbiage that this increase is required for DTE to 'recover' purchased power expense... "billed to the customer without and profit or markup."

What are the politics and policy fueling this increase? Anyone read this 'Information' pg. 1 portion of their recent DTE Gas/ Electric bill???

The following assumes that you put the correct information above--sometimes it is hard to distinguish between cents and fractions of a cent.

First, .1 to .25 cents would be a 150% increase, no?

Second, it appears to be a tiny actual increase, because that is a tiny part of the price you are paying. DTE has a lot of different rates, but you probably pay over 10 cents/kWh already. More likely something like 12, so an increase of 0.15 cents is just over a 1% increase.

Third, neither politics nor policy have much to do with this change--as its name implies, the charge is based on changes in the cost of inputs used to generate electricity. In this case even though oil is down, DTE and its suppliers don't really use oil to produce electricity, but they do use natural gas, and natural gas prices are up. This factor is adjusted up and down [[last year it was down) based upon actual energy costs.

DTE doesn't appear to have a good explanation of how this works, but maybe this one from Consumers will help:

https://customer.consumersenergy.com...-%28pscr%29%3F

[animatedmartian]

Most of DTE's electricity is currently generated through old coal power plants. It's a very cheap method of electricity production.

However, due to regulations and aging power plants, DTE is under pressure to wean off of coal power plants and find new sources of energy. This, of course, costs DTE money. Rate hikes is DTE's way of making up the costs.

Being the stubborn greedy company they are, they've put themselves into a corner where they haven't spent much investment for renewable and clean sources of energy or even replacement power plants for the currently aging stock. For years [[according to reports), they've been raising energy costs on businesses but now are shifting the costs onto residential customers. So it's basically going to get worse before it gets better as DTE is forced to spend money on projects to provide electricity. The question is whether they're going to spend the money wisely or wastefully.

[Zacha341]

Yes, math is not my best subject [[smile). Thank you for your feedback and further information!

The following assumes that you put the correct information above--sometimes it is hard to distinguish between cents and fractions of a cent.

First, .1 to .25 cents would be a 150% increase, no?

Second, it appears to be a tiny actual increase, because that is a tiny part of the price you are paying. DTE has a lot of different rates, but you probably pay over 10 cents/kWh already. More likely something like 12, so an increase of 0.15 cents is just over a 1% increase.

Most of DTE's electricity is currently generated through old coal power plants. It's a very cheap method of electricity production.

However, due to regulations and aging power plants, DTE is under pressure to wean off of coal power plants and find new sources of energy. This, of course, costs DTE money. Rate hikes is DTE's way of making up the costs.

[gvidas]

On my most recent DTE bill, I paid $53.30 for 336 killowatt hours. This works out to an average per-kilowatt-hour price of $0.159.

An additional increase of 0.15 cents [[$0.0015) per kilowatt hour would raise the total paid by $0.504 or about 1%

That rate increase is, in my specific situation, the equivalent of about 3.2 kilowatt hours. Which is about the equivalent of turning the porch light [[a 13 watt compact fluorescent) off for 8 hours every day each month, instead of leaving it on 24/7.

An easier way to offset it would be to unplug the phone and laptop chargers when they aren't being used.


I guess, if I had to make a point with this sort of rambly note, it's that the cost of energy is still low enough that I do not feel much pressure to conserve it at home.

[Mind field]

Why wouldn't you conserve electricity? Money in your pocket is better than money in a corporations pocket!

Solar panels are becoming an increasingly attractive investment and it's taking less time to pay off the price of a system, which then provides you with FREE electricity. It's a no-brainer. If you have any exposed [[unshaded) south facing roof, then solar is worth a look.

[Zacha341]

Solar's not an option for me, but we dial down during the day and unplug as much as possible things not in use. Those huge flat screen computer/ TVs are a big draw I hear, but I don't own one. Yeah, I want to keep my money and expenses are up. Yet when I am at home I want a certain level of heat for comfort.

Why wouldn't you conserve electricity? Money in your pocket is better than money in a corporations pocket!

[animatedmartian]

Why wouldn't you conserve electricity? Money in your pocket is better than money in a corporations pocket!

But then that just gives the corporations another excuse to hike up rates. Conservation is good if you want to be economically/environmentally conscious, but the corporations still got to make a profit.

[wazootyman]

Why wouldn't you conserve electricity? Money in your pocket is better than money in a corporations pocket!

Solar panels are becoming an increasingly attractive investment and it's taking less time to pay off the price of a system, which then provides you with FREE electricity. It's a no-brainer. If you have any exposed [[unshaded) south facing roof, then solar is worth a look.

While I don't disagree in theory - I do have to point out that it is a sizable investment. The cloudiness in Michigan is also a factor.

I had a small-ish array quoted for my home. I forget the exact output, but it was on the order of a couple of kilo Watts. The raw cost was about $13k, which included the panels, grid-tied micro inverters [[mounted to the panels), installation, utility tie-in and misc. electrical work. I was going to have the panels mounted on a detached 1.5 car garage with a southern-facing roof. I was going to do some of the structural reinforcing and trenching [[for the electrical lines between the garage and house) myself to save money.

After tax rebates and a DTE SolarCurrents credit, it was going to cost about $8k out of pocket. That's $5k off; a huge discount, but still a major cost. I calculated that with my current usage, it'd take about 13 years to pay back.

I'm not sure where I'll be in 13 years. Maybe a bigger home. Maybe the next owner would see a huge value in a solar array. Maybe they'd see it as just a liability and potential maintenance issue. In any case, it was decided that the cost just couldn't be justified at this point. Instead, my I've re-lamped my entire home with LED bulbs and focused on high-efficiency products and power supplies.

I'm just throwing this out there as an example. I certainly don't want to deter anyone from doing it. If I could get the out of pocket cost down to a couple of grand [[and/or the payback to a couple of years), I'd go for it. I'm not sure when or if that'll ever be the case, though.

By the way, the company I worked with was http://sunventrix.com/. I have no affiliation whatsoever with them. But they were extremely helpful and if I do end up doing it in the future, I'll be giving them a call back.

[Scottathew]

The rate is increasing only for one component of electricity cost. Other components are decreasing, but the net will be an increase. The total rate increase is somewhat minor\inflationary.

I used 488 KW\H on my December\January bill, that cost me $71.19. With an increase of $0.00258 per KW\H would mean this bill would increase by $1.26.

Keep in mind that 0.258 cents is 0.00258 dollars.

DTE should have done a better job on their bills explaining how minor this is.

My current electric rate is $0.121908 a kilowatt hour [[about 12 cents a kilowatt hour). A $0.00258 increase is a 2.1% increase.

I also have been reducing my energy usage. This is made a lot easier by the DTE Insight phone app. It takes information from my smart meter and breaks down my energy usage hourly. I can view my energy usage a couple days after consumption and see how the changes I'm making effect energy usage.

[CassTechGrad]

While I don't disagree in theory - I do have to point out that it is a sizable investment. The cloudiness in Michigan is also a factor.

I had a small-ish array quoted for my home. I forget the exact output, but it was on the order of a couple of kilo Watts. The raw cost was about $13k, which included the panels, grid-tied micro inverters [[mounted to the panels), installation, utility tie-in and misc. electrical work. I was going to have the panels mounted on a detached 1.5 car garage with a southern-facing roof. I was going to do some of the structural reinforcing and trenching [[for the electrical lines between the garage and house) myself to save money.

After tax rebates and a DTE SolarCurrents credit, it was going to cost about $8k out of pocket. That's $5k off; a huge discount, but still a major cost. I calculated that with my current usage, it'd take about 13 years to pay back.

I'm not sure where I'll be in 13 years. Maybe a bigger home. Maybe the next owner would see a huge value in a solar array. Maybe they'd see it as just a liability and potential maintenance issue. In any case, it was decided that the cost just couldn't be justified at this point. Instead, my I've re-lamped my entire home with LED bulbs and focused on high-efficiency products and power supplies.

I'm just throwing this out there as an example. I certainly don't want to deter anyone from doing it. If I could get the out of pocket cost down to a couple of grand [[and/or the payback to a couple of years), I'd go for it. I'm not sure when or if that'll ever be the case, though.

By the way, the company I worked with was http://sunventrix.com/. I have no affiliation whatsoever with them. But they were extremely helpful and if I do end up doing it in the future, I'll be giving them a call back.

Where do you think the after tax rebates and DTE SolarCurrents credit money comes from? It comes from you and me in the form of either added fees or higher rates from DTE and if it's a tax rebate then it gets added to the federal deficit because the Government had to borrow A HALF TRILLION last year just to pay for stuff like this. The extreme example would be if everyone went solar at the same time then the $5K you saved would get passed to me and my $5K would get passed to you and so on, and so on, so everyone would just be paying the full price. Nothing comes for free.

[Wesley Mouch]

We're quite lucky to have low electric rates in SE Michigan. The assumption that falling oil prices means falling coal prices is wrong. I don't see massive mismanagement by Edison, in fact, I think they're wise to live within the rules and burn coal as long as possible. Sure, its not as clean as nuclear or natural gas, but its a far more wise mid-term choice. Coal is a bit nasty, but I think the economic advantages for us in developing jobs today exceeds the reasonable future costs that will be associated with complying with present and future regulations. I'm quite sure Edison is not ignoring the future of electrical generation. They've just decided that the best thing for their ratepayers and their shareholders is to utilize our existing infrastructure as long as it is legal and prudent to do so.