Upper Peninsula Power Co. has received approval to increase customer rates starting in 2025.

According to the Michigan Public Service Commission, a typical residential customer using 500 kWh per month will see an increase in their monthly bill of $7.52, or 5.7%, starting Jan. 1.

In March, UPPCO filed a request to increase its electric rates by $16.9 million, which would have increased rates for residential customers by 13.6%, Michigan Attorney General Dana Nessel said.

Last week, the MPSC approved a settlement allowing UPPCO to increase rates by $9 million. The approved amount represents a nearly 47% reduction from the utility’s original request, the commission said in a news release.

As part of the agreement, UPPCO will donate $200,000 to organizations that benefit low-income customers in its service area. The utility will consult with MPSC staff and Nessel’s office to identify appropriate organizations to receive the money and the parameters of the donation.

In addition to Nessel, the UPPCO case included Citizens Utility Board of Michigan, Calumet Electronics Corp., Billerud Americas Corp. and the Association of Businesses Advocating Tariff Equity intervened. MPSC employees also took part.

UPPCO provides electric power to a population of approximately 140,000 residents in Alger, Baraga, Delta, Houghton, Keweenaw, Marquette, Menominee, Ontonagon and Schoolcraft counties and an Iron River district.

The company released a frequently asked questions document to explain the reasons for its request. “The increase is necessary to address insufficient coverage of the revenues required to operate the electric utility.” UPPCO explained.

Factors cited included:

— Investments in existing infrastructure, such as E.g. masts, cables, electrical devices and technology.

— Construction of system updates and new infrastructure necessary to support load growth and economic development.

— Significant increases in equipment, materials, supplies and labor costs associated with the Company’s capital projects.

— Increased operating costs for things like fuel, purchased electricity, tree trimming, supplies and maintenance.

The tariff request did not consider or reflect the impact of Michigan’s 2023 energy legislation, which requires utilities to transition to 100% renewable and clean energy by 2040, the company said.

For energy assistance information, customers can visit the UPPCO website at https://www.uppco.com/residential/help-with-your-energy-bill/.

“This has been a busy year with multiple utilities simultaneously seeking rate increases, but my office has been vigilant in intensively reviewing and litigating these cases to protect customers across the state.” Nessel said in a press release.