Michiganians won't freeze in the dark this winter, and they'll be sitting on fatter wallets thanks to lower gas prices, according to the latest annual "Michigan Energy Appraisal: Winter 2010-2011," released by the Michigan Public Service Commission (MPSC).
Natural gas sales in Michigan for 2010 are projected to see a 6% increase over 2009. Unlike recent years, the bulk of the natural gas demand increase can be attributed to the industrial and electric generation sectors, which should see 15% and 34% increases, respectively. Gas storage levels are projected to be sufficient to meet demand this winter. Gas prices are expected to average $9.96/Mcf this winter, a 4% decrease, though prices could vary based on market conditions and pending rate cases, MPSC said.
Demand in almost every energy sector is projected to increase over 2009 levels, due to a return to normal weather, stable prices and a slight rebound from the economic recession of 2009, the MPSC said. "Assuming a return to normal winter weather, most Michigan residents will see a slight to no increase in average winter heating bills," the commission said. "The largest increases will be seen in No. 2 heating oil and propane, whose pricing is largely tied to crude oil."
On the power side, Michigan's electricity sales are expected to increase by 7.6% in 2010, reflecting growth in the residential and industrial sectors. Weather remains a major determinant of summer electricity demand. Michigan's summer weather for 2010 was 32% warmer than normal, which increased the demand for electricity. The projected sales increase in 2010 comes after a decline of 7.5% in 2009 and returns demand to levels seen in 2007.
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