We work to provide reliable and safe energy services at rates as low as possible. We offer a variety of rate options to serve your unique needs. Our electric and natural gas services are regulated by the Michigan Public Service Commission (MPSC).
How Electric Rates Are Set
Learn what goes into the Consumers Energy electric rates, what you’re paying for, and how are they set.
Michigan Energy Rates
What Costs are Included in Rates
Rates are generally split into three parts:
- Major investments that generate and deliver energy. This includes the operation of power plants, electric distribution (poles and wires) and natural gas pipelines. There are also upgrades to stay up to date with environmental regulations that fall under this.
- Operating expenses. This includes fuel for power plants (such as coal and natural gas), the cost of electricity or natural gas that we purchase from the energy market and maintenance, repair, service and billing.
- Michigan energy programs. These programs support areas such as energy efficiency and renewable energy.
Residential Electric Charges
As a residential customer, you have two types of charges on your electric bill: Power Supply and Delivery Service.
Power Supply
Power Supply charges include costs related to creating the electricity and moving the electricity over high voltage transmission lines. The Power Supply costs you pay are directly related to how much electricity you use. This is measured in kilowatt-hours (kWh).
In some of our rates, you may pay a different amount per kWh of electricity. This will depend on the time of the year and how much energy you use. Here is an example using our most common residential rate:
- During winter months (October - May) the price for each kWh remains the same, no matter how much you use.
- During summer months (June -September) there is higher demand, which mostly comes from air conditioner use. This demand makes it more expensive to create or buy electricity. To help reduce energy use during these months, the cost of electricity increases at certain times. This price increase helps keep everyone’s costs down because it helps avoid expensive energy and system upgrades that would otherwise be needed and increase our shared cost.
Energy Delivery
Delivery Service charges are related to providing customer services and local energy distribution.
- System Access: This is a fixed fee of $8.00 per month. This fee covers costs related to meters and billing.
- Distribution: This charge is related to delivering electricity from the transmission system to your home. This includes necessary equipment, maintenance and operating expenses.
- Energy Optimization: This monthly per kWh fee supports Energy Efficiency programs that are included in Michigan’s energy laws. These programs help avoid costly investment in new energy sources by reducing household energy use.
- Other charges on your bill may vary.
Residential Electric Line Items
Power Supply Cost Recovery (PSCR) Factor
This charge helps cover the cost of producing and delivering electricity. Some of those costs—like fuel, buying power from other sources, and using transmission lines—can change month to month.
Your energy rate already includes a base amount for these costs. However, if actual costs go above that base, the PSCR factor is added to make up the difference.
Each year, we review these costs to make sure to only recover what is actually spent. We do not make a profit from this charge. It's just used to cover real expenses.
System Access Charge
This is a fixed monthly fee approved by the Michigan Public Service Commission (MPSC). It helps cover the basic costs of providing service—like metering, billing, and customer support. This fee is not based on how much electricity you use.
Distribution Charge
This charge is based on how much electricity (in kilowatt-hours) you use. It helps pay for the equipment and maintenance we need to deliver electricity from the power grid to your home.
Energy Efficiency Charge
This charge supports our programs that help customers use energy more efficiently. It was approved under a 2016 law and is based on your electricity use (kWh). These programs can help you save energy and money. Learn more at consumersenergy.com/eeprograms.
Renewable Energy Plan Charge
This charge helps us meet Michigan’s renewable energy goals, such as using more wind and solar power. Right now, the charge is set to $0, so it doesn’t appear on your bill. However, it may be added on bills in the future. It’s reviewed every two years and will stay active through August 2029.
Other Surcharges
This is a general label used on your bill to include certain charges that are no longer listed as separate items. One of these is the Energy Efficiency Program Surcharge, which helps fund programs that promote energy-saving upgrades.
Financial Compensation Mechanism (FCM) Surcharge
This charge helps cover costs related to solar energy agreements. It’s based on how much electricity (in kilowatt-hours) you use. The MPSC approved this charge to support solar power purchases. It applies to electricity used between April 25, 2025 and December 31, 2025.
Power Plant Securitization Charge
This allows us to recover costs related to retired power plant assets by issuing bonds. These bonds help spread the cost over time and are paid back through this charge on customer bills. The charge is updated each year through a process called a "true-up" to ensure the correct amount is collected.
Karn 1 and 2 Securitization Charge
This charge was approved to recover costs related to the Karn Units 1 and 2 power plants. We issued bonds in 2023 to cover these costs. The charge began appearing on bills in January 2024. It is adjusted periodically through a true-up process.
LIEAF (LIA) – Low-Income Energy Assistance Fund
This charge helps fund energy assistance programs for low-income households across Michigan, especially during the heating season. It was created by state law in 2013 and is managed by the Michigan Department of Health & Human Services (DHHS). The charge is added to each electric meter and is the same for all customers.
Deferral Surcharge
An MPSC approved surcharge based on how much electricity you use. It applies to service from April 4, 2025 through February 28, 2026.
Demand Response (DR) Surcharge
This charge is based on your electricity use (kWh) and helps recover costs for demand response programs. Demand response encourages customers to reduce or shift energy use during times of high demand such as hot summer days. This helps ease grid stress, prevent outages, and lower costs. Customers who join these programs often earn bill credits or other incentives.
IRM Surcharge
This charge supports investments in critical infrastructure—like upgrades to the electric system—to improve reliability and safety. It’s also approved by the MPSC and began applying to bills starting April 4, 2025.
Renewable Energy Line Items
REP Subscription Fee
The subscription fee covers the cost to build own and operate the renewable facilities that are part of our Renewable Energy Program.
Green Giving Credit
With the Green Giving Credit, you get the same credits as the REP program, but with the subscription fee waived. So, Green Giving customers do not have to pay any costs.
REP Energy Credit
Renewable energy is produced and sold to the grid. That value is given back to you as a REP Energy Credit.
REP Capacity Credit
A credit for the ability of a renewable energy system to provide power when needed, especially during peak demand times.
Other Optional Charges
Peak Time Rewards Program Credits
On select summer days, we call for Energy Savings Events when electricity demand is high. If you shift your energy use outside the peak hours of 2 p.m. to 6 p.m., you earn $1 in bill credits for every kilowatt-hour reduced or moved. There are no penalties if you don’t participate, and you can join up to 14 events per year.
Senior Citizen Bill Credit
Customers who are 65 or older and the head of their household get a $4 credit every month on their bill. Seniors may also qualify for Winter Protection and other assistance programs.
Residential Income Assistance (RIA) Credit
A monthly bill credit for income-qualified customers to help reduce energy costs. Eligibility is based on household income and participation in assistance programs.
Home Heating Credit (HHC)
A state program that helps low-income households pay heating costs. To apply, see HHC details from the State of Michigan. Eligibility is based on income, household size, and heating costs.