FERC Staff Protest of Consumers Energy Compliance Filing

Regs.gov: Federal Energy Regulatory Commission

Filed March 20th, 2026

Detected March 26th, 2026

Summary

The Federal Energy Regulatory Commission (FERC) staff has protested a compliance filing by Consumers Energy regarding its natural gas transportation rate. Staff found that Consumers Energy failed to provide adequate evidence to support its proposed rate, which was intended to comply with a prior Commission order on rate design policies.

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What changed

FERC staff has formally protested Consumers Energy Company's compliance filing, submitted on February 2, 2026, concerning its natural gas transportation rate. The protest, dated March 20, 2026, challenges Consumers Energy's proposed Transmission only Transportation (TOT) service rate, which was meant to align with the Commission's rate design policies as mandated by a December 18, 2025, order. Staff asserts that Consumers Energy has not provided sufficient evidence to justify its claims regarding cost allocation for compression infrastructure and the treatment of forward-looking costs as fixed, making it impossible to determine if the rate is fair, equitable, and compliant with Commission policy.

Compliance officers at energy companies, particularly those involved in natural gas transportation and rate setting, should review this protest to understand FERC's expectations for supporting evidence in rate filings. The lack of substantiation for cost allocations and fixed cost claims is a key deficiency identified by staff. Companies should ensure their compliance filings include detailed breakdowns of operational and maintenance expenses and clear justifications for rate structures to avoid similar protests and potential enforcement actions. While no specific compliance deadline is mentioned for Consumers Energy in this protest, the underlying December 18 Order required compliance or justification, and this protest indicates a continued scrutiny of such filings.

What to do next

Review FERC's specific objections to Consumers Energy's cost allocation and fixed cost justifications.
Ensure all future rate filings include detailed evidence for cost breakdowns and rate structures.
Verify compliance with prior FERC orders on rate design policies.

Source document (simplified)

Content

Commission staff hereby protests pursuant to section 284.123(g)(4)(i) of the Commission's regulations, (1) the compliance filing made by Consumers Energy Company (Consumers Energy) on February 2, 2026, in the above referenced docket.
On May 19, 2025, as amended on September 12, 2025, Consumers Energy filed an application under section 7(c) of the Natural
Gas Act (NGA) and section 284.224 of the Commission's regulations for a limited jurisdiction blanket certificate to transport
and sell natural gas in interstate commerce and requested authority to use its state-approved Transmission only Transportation
(TOT) service rate as the rate for service. In an order issued on December 18, 2025, the Commission directed Consumers Energy
to revise its TOT service rate to comply with the Commission's rate design policies or provide a reasonable justification
as to why it qualifies for an exemption. (2)
On compliance, Consumers Energy states, among other things, that its proposed TOT service rate generally does not include
any variable costs and that the majority of its compression infrastructure supports only storage activities, which are not
components of the TOT service. Additionally, Consumers Energy states that because its cost of service employs a forward-looking,
projected test year, its forward-looking costs are considered fixed. (3)
Commission staff finds that Consumers Energy has not adequately supported its filing or demonstrated that the TOT service
rate is fair and equitable. For instance, while Consumers Energy claims that “the majority of the compression” (4) facilities support storage activity and that its forward-looking costs are considered fixed, it provides no supporting evidence
to substantiate these claims. Furthermore, Consumers Energy does not provide adequate evidence of how it is allocating costs
for the minority of its compression facilities that support its Commission-jurisdictional TOT service rather than its storage
activity. Without evidence, such as a breakdown of its Operation and Maintenance expenses or projected cost of service, Commission
staff is unable to determine whether the TOT service rate is in compliance with the December 18 Order and Commission policy.