DETROIT EDISON TO REDUCE RATES
DETROIT EDISON TO REDUCE RATES DETROIT, April 27 /PRNewswire/ -- Detroit Edison Chairman John E.
Lobbia today said that reductions in operating costs and other efficiencies will enable the utility to reduce electricity rates by the beginning of next year for its 1.9 million customers in southeastern Michigan.
"While amounts and details have yet to be worked out," Lobbia said, "I can tell you that Detroit Edison rates will be reduced to all classes of customers no later than Jan. 1, 1993." Addressing the utility's Annual Meeting of Shareholders, the company's chairman and chief executive officer said the rate reduction will provide residential customers "with some additional disposable income," help business customers become more competitive and make Detroit Edison "a more competitive supplier in an increasingly competitive energy market." As part of a rate settlement in 1988, Detroit Edison, the Michigan Public Service Commission, the attorney general and others representing customers agreed that the utility's base rates would be frozen for five years except for moderate pre-authorized increases and adjustments for inflation. Since 1986, the average price per kilowatthour of electricity paid by the utility's residential, commercial and industrial customers increased from 7.5 cents to 8.5 cents -- a gain of 14.2 percent. That compared with a 26.5-percent increase in inflation during that period, as measured by the U.S. Consumer Price Index. Lobbia said the rate settlement enabled the company to implement "a vast array of improvements that are making customer service better and keeping costs down." He cited the company's new advanced technology Customer Communications Center, improved operation of the Fermi 2 nuclear plant, reductions in fuel costs to 1978 levels and increased use of low-cost, low-sulfur western coal. Now with the end of the moratorium approaching -- part of it on Jan. 1, 1993, and part on Jan. 1, 1994, he said, "The financial benefits will begin to flow directly to our customers." Larry G. Garberding, executive vice president and chief financial officer, said electricity sales to industrial customers in February and March showed strong improvement over 1991 -- the first back-to-back monthly increases since October-November 1990 -- providing "some room for optimism that the economy is improving." He cautioned, however, that cutbacks by General Motors will most likely offset any new sales growth over the next several years. "Once the GM adjustments are behind us, we should experience annual growth of about 1 to 1.5 percent," Garberding said. Lobbia also reported that a $200 million program announced last year to improve the reliability of electric service already has produced impressive results. Between last August and March, the frequency of power outages has been reduced more than 40 percent companywide and the duration of outages more than 50 percent, compared with the averages for those months in the previous three years. At the annual meeting, shareholders acted on two proposals. They: -- Re-elected three directors of the company whose terms were expiring. They are Terence E. Adderley, president and chief executive officer, Kelly Services, Inc., Troy, Mich.; Wendell W. Anderson, retired board chairman and chief executive officer, Bundy Corporation, Detroit; and Walter J. McCarthy Jr., retired board chairman and chief executive officer of Detroit Edison. -- Ratified Price Waterhouse as independent accountants for 1992. -0- 4/27/92 /CONTACT: Lorie N. Kessler, 313-237-8807, or Scott L. Simons, 313-237-8808, both of Detroit Edison/ (DTE) CO: The Detroit Edison Company ST: Michigan IN: UTI SU:
SB -- DE009 -- 3028 04/27/92 10:34 EDT
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|Date:||Apr 27, 1992|
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