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Utilities Rates

Utilities Rates

These are the current utility rates which fund commodity purchases, sustain operations and maintenance, and capital renewal and expansion. They are updated annually for each fiscal year beginning on July 1st.

Explanation of Changes

Utility rates have been approved for Fiscal Year 2025.

Our goal is to provide safe, reliable, and cost-efficient utility services to the campus community. Investments in the Central Power Plant, our distribution system, and incoming DTE service feeds continue to prove their value. It has been more than a year and a half since we experienced an unplanned outage on our university-owned and operated electric system. In fact, while there have been significant disruptions to the regulated utility grid, we have experienced only one unplanned outage in nearly three years on our system. Key factors currently impacting the enterprise and FY25 rates are:

  • Inflation in labor and materials have increased capital plan project costs.
  • Between FY10 and FY24, there were nine years without an increase in the steam rate. For seven years, generated electric rates were also held constant.
  • Following a series of warmer than average winters dating back to FY2020, the FY2025 budget was created assuming another warmer than average winter. Doing so spreads fixed costs over less energy units resulting in a higher per unit rate.

Utility Enterprise Rates

Steam and electric rates are established at levels to recover all operations and maintenance costs for generation and distribution, reserves for major repairs and replacements, debt, and fuels.

U-M Utility Enterprise RatesFY25
Central Power Plant steam (per 1000 lbs)20.950
CPP, North Campus, Ingalls electric (per kwh)0.115

Direct-Purchased Utilities

Utilities purchases, manages, and processes all direct-purchased utilities, which are supplied and metered by an outside utility company and distributed directly to the university customer. These prices fluctuate, and the rates below are our best estimates at this time.

Estimated Direct-Purchased Utilities Costs (including surcharges)FY25
Water, Sewer & Storm (per ccu)14.510
Natural Gas (per ccf)0.538
Electric (per kwh)

The U-M Utility Services Enterprise purchases, manages and processes all purchased utilities. Service charges are applied to direct-purchased utilities to recover overhead and university distribution maintenance.

Service Charges on Direct-Purchased UtilitiesFY25
Administrative (on all utilities) ¹
Green Power Initiative (PPA) Surcharge ²
Water, Sewer, Storm maintenance ³
Direct electric maintenance

¹ Examples include salaries, office expenses, computer hardware and software, legal services, & MISS DIG.
² The total annual Green Power Initiative Surcharge premium collected for FY25 remains stable from FY24. Percentages may fluctuate year to year based on forecast campus-wide utility usage.
³ Covers costs for infrastructure improvements and the replacement of aging piping.

Historical Utility Rates

Previous years rates can be found on the Historical Utility Rates page.

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