May 12--The Michigan Public Service Commission ruled today that Consumers Energy could implement an electric rate hike, but not nearly as big as the utility wanted.

Without discussion, the three-member panel ordered CMS Energy to use $36 million it received from the sale of the Palisades nuclear plant to offset the increase to residential customers.

Under Consumers' original proposal, which would have raised $179 million for the utility, the residential rate hike for the next six months would have been about 6% or $4 a month for residential customers. The amount approved would mean a 3.5% increase, or $2.99 a month.

The revised rate hike, which includes the $36 million from the sale of Palisades, will raise about $53 million for Consumers. The commission's order was even less than the $74.6 million the PSC staff had recommended as more justifiable.

Commission chairman Orjakor Isiogu cited the difficult economic times as one of the reasons the body ruled as it did.

"The result minimizes the effect on residential customers, which could have been as high as a 16% increase," he said.

Last week, CMS Energy chief executive officer David Joos said if the company didn't get its full request, 600 people would have to be laid off, tree trimming would be cut in half and routine maintenance would have to be postponed.

The hike will be in effect for six months and the commission will have until November to rule on Consumers' original rate hike request, which would raise $215 million and boost residential rates by 11%.

Palisades was sold by CMS Energy in 2007. It is located along Lake Michigan in Covert Township. It is now owned by Entergy, a Louisiana-based utility.

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