Energy utilities in Michigan reaped increased earnings during the COVID-19 pandemic because their customers are using more energy at home than usual. Increased revenue from residential customers has more than offset commercial and industrial revenue reductions because residential rates are higher than commercial and industrial rates. DTE Energy estimated it would realize $30 million in gross margin attributed to changes in energy usage patterns related to COVID-19 in 2020.  Consumers Energy earned $28 million more than expected ($16 million electric and $12 million gas). Both utilities committed to voluntary refunds of these windfall earnings.

At the same time as household energy use and costs increased, many residential customers struggled to pay their bills owing to increased unemployment and other COVID-related impacts. Ratepayer relief is badly needed.

This brief argues that windfall COVID-related revenues that utilities have realized, and continue to realize, should be refunded as promptly and directly as feasible to residential customers, targeting the support to those most impacted by the COVID crisis. Both emergency assistance and rate relief could be targeted to those most in need, relatively quickly. In contrast, both DTE and Consumers have proposed to apply their windfall earning to system improvements, rather than returning the money directly to ratepayers.