Consumers Energy Has Not Earned Another Blank Check

Consumers Energy has not earned the benefit of the doubt. Not on another electric rate hike. Not on the proposed hydro dam sale. Not on a business strategy that asks Michigan families to pay more for reliability while the company gives up existing power-producing assets and locks customers into buying that power back from a private equity-backed owner for 30 years.

The company is asking the Michigan Public Service Commission for roughly $455.8 million more every year in base electric revenue. It also wants a separate $25 million surcharge, about $52 million over three years for storm-related costs, a 9.8% residential electric rate increase, and an increase in its authorized return on equity from 9.9% to 10.25%. Consumers estimates a household paying about $155 a month could pay roughly another $13 a month. That is another $156 a year. And this comes after another electric rate increase already took effect May 1, 2026.

To be clear, Consumers is not claiming it needs higher rates because it is running out of electricity. The rate case is largely about grid reliability, distribution upgrades, tree trimming, equipment replacement, storm resilience, and other system investments. Those are real responsibilities. Nobody serious thinks wires maintain themselves, storms do not happen, or old equipment magically becomes new because ratepayers are tired of opening higher bills.

But that is exactly why the dam deal deserves scrutiny. Consumers owns 13 hydroelectric facilities across Michigan with roughly 132 megawatts of generating capacity. These are not decorative pieces of history. They generate electricity. Consumers says they are old, expensive to maintain, and facing major federal relicensing costs. Fine. That argument should be taken seriously. But taking it seriously does not mean swallowing the company's preferred answer whole.

Consumers wants to sell those 13 dams to Confluence Hydro, affiliated with Hull Street Energy, for $1 each. Thirteen dams. Total purchase price: $13. Then Consumers would sign a 30-year contract to buy electricity from those same facilities. The reported starting price is around $160 per megawatt-hour, rising 2.5% each year, and Consumers has acknowledged that the initial price is roughly twice what it normally pays for hydroelectric power.

So the company wants customers to finance massive new investment in the electric system while it gives up existing generating infrastructure. It wants customers to pay more for reliability while transferring generation assets to private equity. It wants a higher authorized return for shareholders. Its CEO made about $10.53 million in total compensation in 2025. CMS Energy's six named executives received more than $24 million combined. And Michigan families are once again being told the bill needs to go up.

That does not prove every dollar of executive compensation is improper, and it certainly does not mean executive pay alone could fund the entire electric grid. It could not. But accountability matters. When a regulated monopoly asks captive customers for another $455.8 million every year, every corporate expense becomes fair game: executive salaries, bonuses, stock awards, public relations, external affairs, consultants, lobbying, administrative overhead, corporate travel, and shareholder-oriented incentive compensation. Before families are told there is no alternative but to pay more, Consumers should have to show what it has cut inside its own house.

The burden of proof belongs entirely to Consumers. Not the customer. The company should have to prove why every dollar of the rate increase is necessary, what previous rate increases accomplished, what measurable reliability improvements customers will receive, and why customers should pay more almost immediately after the last increase took effect. A regulated monopoly is not a normal business. Most customers cannot shop around because they dislike the price. If you live in Consumers' electric service territory, Consumers controls the local distribution system. That kind of power requires aggressive scrutiny, not polite rubber-stamping.

The same burden applies to the dams. Consumers should have to prove why selling them is better than keeping them, improving them, restructuring them, or pursuing another ownership model. It should have to explain why $13 is an acceptable purchase price. It should have to show, in plain numbers, how much customers will pay under the 30-year power contract. It should have to identify who carries the risk if the buyer later cannot maintain, repair, or decommission the dams. And it should have to answer the most obvious question in the room: why can private equity apparently make these dams work financially if Consumers says they are such a burden?

The price escalator alone should slow this whole thing down. A starting price of $160 per megawatt-hour with 2.5% annual increases does not stay at $160. It moves toward about $200 around year 10, about $250 to $260 around year 20, and more than $300 near the end of 30 years. The exact contract economics may be more complicated than that simple math, but the direction is not complicated at all. Consumers is not talking about a short bridge agreement. It is talking about a three-decade relationship with an escalating price.

This is not just some political complaint from people who distrust utilities. An administrative law judge reviewing the proposed transaction recommended that the MPSC reject it, using language including “highly problematic,” “unreasonable and imprudent,” and inconsistent with the public interest. Gov. Gretchen Whitmer has urged regulators to reject the transaction unless major concerns are addressed. The Michigan Natural Resources Commission unanimously opposed the proposed transaction. Ratepayer advocates, environmental groups, state officials, and others have raised concerns. When that many different alarms are going off, regulators should stop treating the company's presentation like the final answer.

One of the more telling pieces is the reported $270 million financial component tied to the original transaction. Critics argued Consumers could receive a substantial financial benefit through the deal. After opposition grew, Consumers proposed putting about $270 million into a Hydro Safety Fund. That raises a fair question: if that money could suddenly be redirected into a safety fund once the deal became politically difficult, why was customer protection not built that way from the beginning?

The real question is who benefits. The dam sale may make perfect sense for CMS Energy. It could remove aging infrastructure from the company's ownership, shift maintenance risk, make future costs more predictable, transfer long-term liability, and turn owned generation into purchased electricity. Those may all be attractive outcomes for the corporation. But regulators are not supposed to ask whether the deal improves Consumers' balance sheet. They are supposed to ask whether it leaves customers financially better off.

Consumers Energy is free to propose whatever business strategy it wants. It is not entitled to make Michigan families finance every strategy it chooses. If Consumers wants another nearly half-billion dollars per year from captive customers while giving away generating assets and buying their power back from private equity for 30 years, regulators and elected officials should demand proof that customers come out ahead. Until Consumers can prove that, line by line and dollar by dollar, the answer to both the full rate increase and the dam deal should be no.