Michigan Lawmakers Push Utility Rate Freeze as Bills Aim to Block Annual Electricity Increases

Michigan residents are facing a familiar pattern. Every year, utility bills arrive with higher prices. The cycle repeats like clockwork, leaving families to wonder if there is any relief in store.

A group of Democratic senators in Lansing are trying to break the pattern. They have introduced legislation that would require a minimum of three years to pass between requests for utility rate increases.

Senate Bill 768, sponsored by eight Democratic senators, would change state law from its current 12-month minimum to a three-year freeze between requests for rate hikes.

At the end of the day, this reality where consumers are slapped with continual rate increases every single year, it is simply not sustainable for families here in our state, said bill sponsor Sen. Kevin Hertel, D-St. Clair Shores.

Hertel introduced the bill before the Senate Energy and Environment Committee Thursday. The proposal would extend the legally-mandated time between utility rate increase requests from one year to three years.

Michigan Public Service Commission Chair Dan Scripps told senators that energy costs are high and they are getting higher. He added that the problem was not unique to Michigan.

High rates of inflation in recent years, especially severe for power equipment like poles, wires and transformers, coupled with the impact of federal tariffs and tax policy and tightening electric supply on the regional grid are all driving costs up, Scripps said.

Aging infrastructure is also prompting big spending by utilities as they make necessary updates to equipment. A deep-dive audit of outage problems for DTE and Consumers customers found both utilities systems hampered by old infrastructure.

Consumers substation transformers average more than 30 years old. DTE grid contains some power poles installed before 1910, Scripps said.

The utilities have cited the need to invest in both aging power and gas systems to increase reliability as a primary driver behind yearly rate requests. They say their customer bills fall below national averages.

The spending is showing results, particularly in improving power outage times that have historically been among the worst in the nation, they say.

Sen. Kevin Hertel listens as Gov. Gretchen Whitmer delivers the State of the State address on Wednesday, Feb. 26, 2025, inside the Michigan House of Representatives chamber at the Michigan State Capitol. Hertel is proposing legislation that would extend the time between utility rate increase requests.

It is one of a range of recent utility reform proposals to emerge in Lansing, as Michigan grapples with rising energy costs. Other lawmakers from both sides of the aisle have blamed inflated utility profit margins, state renewable energy mandates or utilities influence in state politics for the added burden on ratepayers pocketbooks.

Presenting to senators on Thursday, one of the state top energy regulators, Michigan Public Service Commission Chair Dan Scripps, pointed to hodgepodge of factors upping utility bills.

Energy costs are high, and they are getting higher, he said, adding that the problem was not unique to Michigan. High rates of inflation in recent years, especially severe for power equipment like poles, wires and transformers, coupled with the impact of federal tariffs and tax policy and tightening electric supply on the regional grid are all driving costs up, Scripps said.

Aging infrastructure is also prompting big spending by utilities as they make necessary updates to equipment, he added. A deep-dive audit of outage problems for DTE and Consumers customers found both utilities systems hampered by old infrastructure, according to Scripps, with Consumers substation transformers averaging more than 30 years old and DTE grid containing some power poles installed before 1910.

The utilities have cited the need to invest in both aging power and gas systems to increase reliability as a primary driver behind yearly rate requests. The spending is showing results, particularly in improving power outage times that have historically been among the worst in the nation, they say, emphasizing that their customer bills fall below national averages.

But some argue the yearly rate hikes make it difficult for households to budget. Hertel has framed his bill as offering the possibility of multiyear rate plans, where rates are set for several years at a time.

The approach, employed in some other states, is no guarantee of reduced costs, and its success depends on how it is designed, according to a 2025 analysis from the nonprofit think tank RMI.

Proponents say it can shift utilities profit motive in a way that benefits ratepayers. With yearly rate hikes, utilities can be incentivized to continually invest more in infrastructure that earns an immediate ratepayer-funded return for shareholders, whereas under a multi-year plan they could profit by controlling costs, pocketing the savings, supporters say.

However, there is also the risk that multi-year rate plans could result in upfront approval of rates based on long-term forecasts that can prove inaccurate, ultimately hurting customers. They can also include mechanisms that escalate rates based on pre-defined formulas.

Hertel bill only changes the minimum time between rate request filings and does not include further direction for regulators who review the utility rate cases.

A DTE spokesperson declined to share a position on the bill.

Consumers spokesperson Katie Carey said in a statement that the utility opposes it as introduced but is open to legislation enabling multi-year rate proceedings. Currently the bill may have longer-term risk to customer affordability and reliability, she added.

As seen in the long-standing debate over road funding, delaying necessary investments does not result in a safe or reliable system and raises the cost of repairs, Carey said.

Asked for his position on the bill by senators, Scripps stopped short of a full-throated endorsement, saying the state current framework is generally constructive, while acknowledging the yearly requests perpetuate public frustration.

The proposal is a great starting point for an overdue conversation around how we provide some meaningful relief both in the timing and the magnitude of costs that customers are expected to absorb, Scripps said.

The Senate committee took no vote on the legislation Thursday. In a Legislature where each chamber is controlled by an opposing party and few bills are moving ahead, the proposal would need Republican support to advance toward becoming law.

Meanwhile, U.S. Representative Haley Stevens introduced the Stop Unfair Electricity Prices Act in Washington last week. The legislation aims to hold investor-owned utility companies accountable and protecting Michigan families from rising electricity costs while executives and shareholders reap significant profits.

The bill penalizes any rate hikes that happened after January 1, 2026, meaning this legislation would actively cut Michigan families energy bills.

Over the past two decades, Michigans electricity rates have outpaced inflation and risen faster than in 46 other states. In that time, the average Michigan family has seen their annual electricity bill skyrocket by roughly $850.

Corporate utilities continue to raise costs on Michiganders while reporting strong profits and awarding massive compensation packages to their executives. In 2024, Michigans two largest corporate utilities paid more than $10 million each to their CEOs.

Despite record profits, one of those utilities is now asking state regulators to approve yet another massive rate hike on Michigan families after recently raising rates.

The Stop Unfair Electricity Prices Act would give Michigan families a reprieve on electricity rate hikes for three years by imposing significant penalties on investor-owned utilities that raise rates.

If they raise residential rates in year one, they lose their federal funding. If they raise residential rates in years two or three, they must cut executive pay by twice the percentage of the rate increase or lose their federal funding.

Michigans families are paying more and more for electricity, yet too many are getting worse service in return, said Rep. Stevens.

While hardworking Michigan families struggle to afford higher bills, corporate executives are getting richer off their backs. That is unacceptable. This legislation makes clear that if utilities want access to federal taxpayer dollars, they must put Michigan consumers first.

Sources:

• MLive: https://www.mlive.com/news/2026/04/michigan-lawmakers-want-to-stop-utilities-from-raising-rates-every-year.html
• House of Representatives: https://stevens.house.gov/media/press-releases/rep-stevens-introduces-bill-crack-down-corporate-utilities-protect-michigan-0