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Michigan Gas Bills Benefit from Mild Temps, Lower Wholesale Prices

The political backlash from high winter heating bills may not be nearly as severe as first expected because mild weather has pulled the rug out from under wholesale prices. Consumers Energy said last Wednesday that its customers can expect about half of the increase in prices that the utility previously projected.

Consumers Energy COO John Russell told a state legislative panel that conservation and lower prices are keeping heating bills much lower than what was forecast. The utility projected last fall that a typical residential customer would see an average bill increase of $40 to $50 per month this winter. Consumers Energy now projects the average bill increase will be about half that -- roughly $25 per month -- for the five-month heating season, which runs from Nov. 1 to March 31.

Earlier this month, the Energy Information Administration predicted that winter residential space-heating expenditures would be lower than previously expected but still high compared to last winter. On average, U.S. households heating primarily with natural gas likely will spend $257 (35%) more for fuel this winter than last winter, EIA said in its Short Term Energy Outlook.

Russell warned that the updated projection on Michigan heating bills shouldn't reduce the focus on conservation and providing assistance to customers in need. "High natural gas prices are here for the long term and we need to work together to help customers deal with higher bills. The best way for customers to deal with today's high natural gas prices is to conserve energy and call us if they're going to have trouble paying their bill," Russell said in testimony prepared for the Michigan House Energy and Technology Committee.

Consumers Energy spokesman Dan Bishop said the company this winter has engaged in the most extensive consumer awareness campaign in its history so that consumers know high winter bills are likely but can be reduced. Bishop called it a "multipronged effort" to educate customers, including free practical tips on how to reduce heating bills in company newspaper and radio advertising, an enhanced website and numerous presentations.

Russell said that more energy assistance dollars are on the way for low-income customers. The Michigan Public Service Commission allocated $27 million for aid last month in a Consumers Energy electric rate case order.

Although the company could not provide details on the level of conservation seen in its service territory so far this winter, Consumers Energy said it has seen a sharp increase in the number of customers enrolled in the Winter Protection Plan, which provides shutoff protection for low-income and senior citizen customers. Last December, about 57,000 customers were enrolled in the plan, compared to 41,000 in December 2004. The company's budget plan, in which a customer's estimated annual energy bill is divided into equal monthly payments, also offers customers another tool to manage their winter heating costs.

Consumers Energy provides natural gas and electricity to more than six million of Michigan's 10 million residents.

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