Getting in line with the rest of the country that has alreadypassed the increased costs of natural gas through to its customers,Consumers Energy of Michigan has begun warning its customers thatthe three-year price freeze imposed on its voluntary Gas CustomerChoice program instituted in April 1998, will come to an end inMarch 2001.
“Today, our price for natural gas is within a few pennies -three cents to be exact – of the price in July 1992,” testifiedCarl English, Consumers Energy’s CEO of natural gas, at a MichiganHouse and Technology Committee hearing last week. “That’s in actualnumbers, without taking inflation into account.”
The meeting was called to discuss current gas price and supplyissues as well as the current status of the various choice programssponsored by utilities within the state. Another utility, Michcon,approached the commission about their current choice program pricefreeze. The freeze was supposed to be lifted at the end of 2001,but the utility has asked the commission to end it earlier, inexchange for a distribution credit to its customers.
Consumers Energy currently has a gas price increase requestpending before the Michigan Public Service Commission (MPSC). “Ourrates will reflect what’s going on in the marketplace. That meansan increase of $20 to $30 a month, on average, for the typicalresidential customer using about 120,000 cf a year,” English said.”This increase includes no surcharges or profit. We will charge ourcustomers only what we pay for gas.
“Actually, our proposed rates, now under review by thecommission, will still be below the market price thanks to existinglong-term supply contracts and Consumers Energy’s undergroundstorage system,” he said. “That system is one of the best in thenation and allows us to buy gas during summer months when pricesare usually cheaper.”
The CMS Energy Corp subsidiary also listed ways its customerscan manage their heating costs next winter, including the fact thatthe choice program will expand from 300,000 up to 600,000 customerson April 1, so more customers can shop around for lower prices.English also pointed out that customers can spread their gas costsover a 12-month period.
In his testimony, English urged lawmakers to take several stepsbefore next winter. “First, let President Bush, Energy SecretaryAbraham, and federal lawmakers know that you support the Low-IncomeHome Energy Assistance Program and would like to see it expanded,”said the CEO. “Second, make sure the Family Independence Agency andother departments have sufficient funds in the coming fiscal yearto support their heating assistance programs, in light of thehigher prices. Third, explore using tax credits, weatherizationawards or other incentives to encourage energy conservation.”
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