ESCANABA — Michigan Public Service Commission has approved a settlement agreement allowing Upper Michigan Energy Resources Corp. to raise rates by $6.6 million, resulting in an average increase for residential customers of slightly more than $10 a month.

UMERC sells electricity to more than 37,000 customers in Alger, Baraga, Delta, Dickinson, Gogebic, Houghton, Iron, Marquette, Menominee and Ontonagon counties. Customer service for UMERC in the U.P. is provided by We Energies.

In a news release, MPSC said a typical residential customer using 500 kilowatt hours a month in the former Wisconsin Electric Power Co. service territory will see an increase of $10.51 in their monthly bill starting Jan. 1, a 15.4% increase.

UMERC had sought to raise rates $11.16 million to fund infrastructure investments in new generation, maintaining safety and reliability and other factors. If approved, it would have increased UMERC’s residential customers’ electric rates by 18.7%, according to Michigan Attorney General Dana Nessel.

Nessel intervened in the rate increase case, along with Citizens Utility Board of Michigan and Billerud Americas Corp. MPSC staff also participated.

MPSC released the order during a regular commission meeting Thursday at Bay College in Escanaba.

Among other steps, the agreement includes the following:

— Beginning in 2026, UMERC agrees to opt into the state’s Low Income Energy Assistance Fund, which raises up to $50 million each year to fund energy assistance and energy self-sufficiency programs.

— UMERC agrees to implement a residential income allowance and senior bill assistance program.

— UMERC will conduct a line loss study for its entire service territory to inform future requests for a line loss factor before filing another electric rate case.

— UMERC will work with MPSC staff to develop and file a distribution investment and maintenance plan in Case No. U-20147 by Jan. 30, 2026.

— UMERC is authorized to implement a rate realignment plan to gradually unify rates for its two service territories, Wisconsin Electric Power Co., or WEPCO, and Wisconsin Public Service Corp., or WPSC.

According to MPSC, a typical residential customer using 500 kWh a month in the former WPSC service territory will see an increase of $10.48, or 15.8%, in their monthly bill starting Jan. 1. Under the rate realignment plan, charges for customers in that territory will see an additional monthly increase of $4.24 by 2033. Meanwhile, customers in the former WEPCO service territory will see a reduction of 21 cents in the new rate by 2033.

The settlement reduced UMERC’s return on equity to 9.86%, down from the 10.25% it had requested. If approved, the 10.25% return on equity would have been highest in the state and nearly the highest in the nation, Nessel said in a news release.

“By reducing UMERC’s electric rate hike request by 50% and establishing programs to keep monthly energy bills more affordable, we’ve secured a settlement that delivers vital support to ratepayers,” Nessel said in a news release. “My office will continue to advocate for utility customers and put their needs ahead of corporate shareholders.”

UMERC said its average customers’ bills will remain less than other electric utilities in Michigan.

In other action, MPSC approved a settlement agreement granting a certificate of public convenience and necessity for DTE Gas Co. to build and operate a 2.1-mile, 2-inch natural gas pipeline in Menominee County. DTE Gas proposed the pipeline to transport renewable natural gas, or RNG, from a farm in Daggett Township to the natural gas transmission and distribution system.