Mich.'s Utilities Seek Double-digit Rate Hikes

Last June, regulators authorized Consumers to raise the average residential bill $2.64 a month. Edison in December was OK'd to add $2.51 to the typical residential bill. Both increases were less than what was proposed by the companies, and their latest requests could be modified by regulators, too.

But an energy law approved last fall by Gov. Jennifer Granholm and legislators puts pressure on regulators to rule on rate cases more quickly than in the past. If a final order isn't issued within a year, a proposed increase is considered approved.

Barry Cargill, who heads a coalition of competitor power suppliers and their customers, says it's "very predictable" the utilities asked for sizable rate increases because the new energy law limits outside companies' ability to come in and compete with them.

"The faster they're able to get their rate increases through, the faster they can come through with the next one," Cargill says.

But Holyfield says utilities could "never quite catch up financially" under the old system because the Public Service Commission might take nearly two years to decide on rate hikes. Utilities now will be able to seek higher rates every year.