A typical residential customer using 100 cubic feet of natural gas per month will see an increase of $1.98, or 2.3%, in their monthly bill under a rate increase approved for DTE Gas Co., the Michigan Public Service Commission said.

The approved increase was a 57% reduction from the amount the utility sought, MPSC said in a news release.

Also, an Infrastructure Recovery Mechanism surcharge will add 66 cents to monthly bills starting Thursday. The IRM surcharge will increase annually until 2029, resulting in an additional $6.28 a month by Jan. 1, 2029, over the initial rate.

DTE Gas serves about 1.3 million customers across Michigan, including the Upper Peninsula.

The company filed a request in January 2024 to raise rates by $266 million, with $106 million already reflected in rates from the previously approved infrastructure surcharge, for a net increase of $160 million.

The company said the increase would primarily fund continued infrastructure investment and modernization of its natural gas transmission and distribution system as well as cover higher operating and maintenance costs.

The new rates in the order are the first authorized since December 2021, when regulators signed off on a $84-million hike. The increase approved this month totaled $114 million.

Intervenors in the case included Michigan Attorney General Dana Nessel’s office, along with the City of Ann Arbor; Billerud Americas Corp.; Sierra Club; Association of Businesses Advocating Tariff Equity; Dearborn Industrial Generation LLC; The Ecology Center; Union of Concerned Scientists; Environmental Law and Policy Center; Vote Solar; We Want Green Too; Soulardarity; Michigan Power LP; Retail Energy Supply Association; Natural Resources Defense Council; Michigan Environmental Council; Citizens Utility Board of Michigan; and the Urban Core Collective. MPSC staff also participated.

A nearly 10% increase would have occurred if DTE’s original request had been granted, Nessel said in a news release. Nessel noted that MPSC adopted her recommendation to remove DTE’s private jet travel costs from the new rate order.

“The Commission’s decision to slash DTE’s requested rate hike by more than half will save consumers hundreds of millions of dollars on their utility bills,” Nessel said.

DTE, meanwhile, said the lower rate increase “may inhibit our ability to implement the work that will allow us to continue providing the level of service that our customers have come to depend on.” The affected work could include the upgrade of older cast iron pipes with modern, more durable materials, the company said in a statement.