Consumers Energy Prepares Customers for Prices
Getting in line with the rest of the country that has already
passed the increased costs of natural gas through to its customers,
Consumers Energy of Michigan has begun warning its customers that
the three-year price freeze imposed on its voluntary Gas Customer
Choice program instituted in April 1998, will come to an end in
"Today, our price for natural gas is within a few pennies -
three cents to be exact - of the price in July 1992," testified
Carl English, Consumers Energy's CEO of natural gas, at a Michigan
House and Technology Committee hearing last week. "That's in actual
numbers, without taking inflation into account."
The meeting was called to discuss current gas price and supply
issues as well as the current status of the various choice programs
sponsored by utilities within the state. Another utility, Michcon,
approached the commission about their current choice program price
freeze. The freeze was supposed to be lifted at the end of 2001,
but the utility has asked the commission to end it earlier, in
exchange for a distribution credit to its customers.
Consumers Energy currently has a gas price increase request
pending before the Michigan Public Service Commission (MPSC). "Our
rates will reflect what's going on in the marketplace. That means
an increase of $20 to $30 a month, on average, for the typical
residential customer using about 120,000 cf a year," English said.
"This increase includes no surcharges or profit. We will charge our
customers only what we pay for gas.
"Actually, our proposed rates, now under review by the
commission, will still be below the market price thanks to existing
long-term supply contracts and Consumers Energy's underground
storage system," he said. "That system is one of the best in the
nation and allows us to buy gas during summer months when prices
are usually cheaper."
The CMS Energy Corp subsidiary also listed ways its customers
can manage their heating costs next winter, including the fact that
the choice program will expand from 300,000 up to 600,000 customers
on April 1, so more customers can shop around for lower prices.
English also pointed out that customers can spread their gas costs
over a 12-month period.
In his testimony, English urged lawmakers to take several steps
before next winter. "First, let President Bush, Energy Secretary
Abraham, and federal lawmakers know that you support the Low-Income
Home Energy Assistance Program and would like to see it expanded,"
said the CEO. "Second, make sure the Family Independence Agency and
other departments have sufficient funds in the coming fiscal year
to support their heating assistance programs, in light of the
higher prices. Third, explore using tax credits, weatherization
awards or other incentives to encourage energy conservation."