The Michigan Public Service Commission (MPSC) decided Tuesday to establish emergency billing practices to create some relief for customers from high natural gas and power costs this winter.

State regulators also awarded seven organizations $41 million in grants to help low-income utility customers with their winter bills and issued an order directing commission staff to prepare a report on energy efficiency programs that will form the basis of hearings to be held on the subject early next year.

“With the alarming increases in energy costs since Hurricanes Katrina and Rita, Michigan’s electric and natural gas customers face dire circumstances this winter,” said MPSC Chairman J. Peter Lark. “My fellow commissioners and I are greatly concerned about the negative effects these large increases will have on the health, safety and welfare of customers. The emergency rules we established today will help soften the economic blow that residential and business customers will soon face.”

Among the new rules approved are a five-day extension for utility bill due dates, removal of shut-off authorization for payment failure, restrictions on payment amounts from prior settlements, removal of shut-off authorization regarding customers who are 65 years or older and restrictions on deposit requirements. The rules still must go to Gov. Jennifer Granholm for her concurrence and then be approved by the Office of Administrative Hearings and Rules and the Legislative Service Bureau.

The MPSC also awarded $41 million in grants from the Low-Income and Energy Assistance Fund to the Michigan Department of Human Services (DHS), Downriver Community Conference, Salvation Army, Lighthouse Emergency Services, Michigan Community Action Agency Association, Newaygo County and The Heat and Warmth Fund.

“With the alarming spike in natural gas prices, it is more important than ever that low-income customers get the help they need to keep the heat on this winter,” said Lark.

The commission also issued an order directing the staff to prepare an overview of electric and natural gas energy efficiency programs in Michigan and elsewhere and to make recommendations in a report by Jan. 17, 2006 on potential efficiency gains and what educational assistance programs might be used. The staff recommendations should include alternatives designed to improve energy efficiency, make energy utility services more affordable for Michigan ratepayers, and enhance the state’s economy. Following the report, the MPSC will hold public hearings to review the report’s findings and to develop a consensus on a course of action.

About 80% of Michigan households use natural gas for space heating, and gas prices have “nearly tripled in recent years,” Lark noted. “The impact of the recent hurricanes has only made the need for a multi-faceted, efficient and effective approach to this situation more important. A thorough review of energy efficiency programs in Michigan and elsewhere will help us implement practical, cost-effective and achievable suggestions to reduce energy demand.”

Michigan’s interest in energy efficiency and energy conservation follows a proposal announced on Monday by Maine Gov. John Baldacci for a regional natural gas conservation effort with a goal of cutting New England gas consumption by 5% by 2011 (see Daily GPI, Oct. 18).

In an unrelated action, Michigan Attorney General Mike Cox filed testimony Monday in the gas cost recovery (GCR) cases of Michigan’s four major gas utilities, challenging the gas cost increases proposed for this winter. Cox told the MPSC that Consumers Energy, Michigan Consolidated Gas, Aquila and Semco Energy should delay their commodity cost increases until after the winter heating season and spread them over 12 months rather than only four (see related story).

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