FERC last week opened a fresh settlement proceeding to determine the fairness of DTE Electric’s decreased revenue requirement for reactive power services, an issue already under scrutiny by the agency (ER17-2465).
DTE in April asked the commission to approve an $11 million annual revenue requirement for reactive supply in the ITC transmission pricing zone, down 14% from the current $13 million requirement (ER17-1414). The Detroit-based utility submitted the revised request in September to account for an additional $118,000 decrease stemming from the Nov. 14 retirement of St. Clair Unit 4, an aging coal-fired generator. The first request had been under settlement proceedings for four months by the time of the second filing (EL17-71).
The company cited seven retirements, increased investments in generation units that provide reactive service, and the replacement of its total revenue requirement with unit-specific revenue requirements as reasons behind the rate decrease.
FERC said preliminary analysis shows that DTE’s rate schedule may still be unreasonable even with the $118,000 decrease, and consolidated the newly opened settlement proceeding with the existing one under a new docket, EL18-23.
“Because DTE Electric is proposing a rate reduction, but a further rate decrease may be appropriate, we will institute a Section 206 proceeding,” FERC wrote.
— Amanda Durish Cook
