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DTE asking customers to pick up the tab for trips on private corporate jets
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As early as next month, the state could weigh in on DTE Energy’s latest consumer rate increase requests amid opposition from Michigan Attorney General Dana Nessel, who is fighting the utility’s plans to spend tens of thousands of dollars on private corporate jet trips at the expense of its customers.
The corporate jet travel was disclosed by Nessel’s office in cases filed by DTE seeking rate increase approval from the Michigan Public Service Commission. Nessel has opposed the proposed increase in her capacity as a consumer advocate, saying they should be cut by more than half.
DTE Gas filed its request for a $266 million rate increase in January, followed by a request by DTE Electric in March, seeking a $456.4 million increase.
Additional hearings are scheduled in September for the DTE Electric case, and a proposed decision from the administrative law judge handling the DTE Gas case is also expected in early September.
And while this is not the first time that the attorney general’s office has requested travel information from DTE, it is the first case of contested travel expenses “so significant” it prompted the attorney general to identify it as a standalone issue in its filings, a spokesman told the Free Press on Monday.
According to an expert’s testimony hired by Nessel reviewed by the Free Press, the two companies spent tens of thousands of dollars for travel on corporate jets in 2022: $15,841 for a one-way trip from Houston to Oakland County for a single board member; $10,281 for a roundtrip to Mackinac Island for five executives to attend the Mackinac Policy Conference put on by the Detroit Regional Chamber; and more that $73,000 to fly several executives and board members to and from Fort Lauderdale for the annual DTE shareholders meeting. The plane typically flies out of the Oakland County International Airport in Waterford.
Together the 17 trips in 2022 cost over $246,391, according to testimony from the consultant working for the attorney general’s office, and DTE is asking that future travel expenses be covered in the rate-increase requests for DTE Electric and DTE Gas.
DTE’s travel request is 33% more than what it spent in 2022, or a total of $333,000 for the two companies, for a year-long period, according to testimony in the case by the expert working for Nessel, Sebastian Coppola, an independent business consultant in Rochester.
In statement, DTE said its leaders relied on limited, corporate air travel for business needs – including meetings which provide best practices and information sharing to run “best-in-class” energy companies, as well as meetings necessary to attract investment dollars into Michigan. DTE board members who chose to fly on a corporate jet must pay for the costs, minus the price of a ticket on a commercial flight.
The trips allowed executives and board members to attend meetings with investors and security analysts, and out-of-town board of directors meetings.
DTE Energy is a publicly traded company based in Detroit and has multiple subsidiaries.
The utility has said the rate increases are needed to improve reliability and would be about an $11 monthly increase for the average residential electric consumer, and a $10 monthly increase for the average gas consumer.
Nessel’s office is challenging both rate-increase requests, and has objected to passing along the costs of travel on corporate jets to rate-payers. According to Coppola’s testimony in the two cases, DTE leases a fractional share of an aircraft for use by executives at the vice president level and above for business travel. Board members also travel on the corporate aircraft, records show.
In his written testimony, Coppola said the Michigan Public Service Commission should not allow DTE to recover the costs of private corporate jets, especially because the travel pertains to investor and board of director matters that do not directly benefit consumers, but may benefit shareholders.
Coppola’s testimony also noted that while commercial flights may be less convenient, they are less costly and have less of an impact on the environment when comparing the emissions of private and commercial jets, and considering the number of passengers they carry.
In 2020, DTE Energy announced a goal of net zero emissions by 2050. “Private jet travel certainly goes counter to that goal,” according to Coppola’s testimony.
Three of the passengers on a DTE flight to Marquette were from an environmental organization, The Nature Conservancy. Helen Taylor, who runs the conservancy’s Michigan office in Lansing said it was an opportunity for the conservancy to show DTE its work in forest preservation in the Upper Peninsula.
“I think it was a positive outcome,” Taylor told the Free Press. She said the conservancy works with partners of all kinds and makes decisions about transportation based on the circumstances.
In a statement, Matt Helms, a spokesman for the Michigan Public Service Commission, said: “We are unable to comment on issues brought up in rate cases pending before the commission, except to say that the Commission takes seriously its statutory mandate to review utility costs for reasonableness and prudence.”
Nessel argues that DTE Gas should receive an annual increase of no more than $112 million, less than half the amount requested. The DTE proposal would raise rates for consumers by almost 10%, her proposal would result in a smaller rate increase of about 4%, according to her office.
She also argues that DTE Electric’s annual rate increase should be no more than $139.5 milllion. DTE’s proposal to raise rates to $456.4 million would hike rates for residential consumers by 10%, while her proposed amount would raise rates by 2.5%.
More: DTE Energy pushes for another electric rate increase: How much more you’d pay
In a press release, Nessel said DTE Electric asked for the latest rate increase just four months after the Michigan Public Service Commission granted the company a $368 million annual rate increase.
More: DTE seeking $266 million increase for natural gas rates; AG’s office disagrees
“DTE files these rate hike requests fast and flimsy. We consistently find very little support for many of DTE’s claims.” said Nessel said in a May news release about the DTE Gas rate hike. “A lot of the proposed spending is questionable at best and at times downright insulting to consumers.”
DTE sells natural gas to 1.3 million customers across Michigan, and electricity to 2.2 million customers in Southeast Michigan.
Contact Jennifer Dixon: jbdixon@freepress.com
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