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 March 2001.

"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."

Alex Steis

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