Even with this winter expected to be colder than winter 2005-2006, the Michigan Public Service Commission (MPSC) said it expects residential natural gas bills for the season will be lower than they were last year. The report also predicts that 2006 electricity sales within the state will likely reveal a 0.8% decrease compared to 2005.
Inside the commission’s “Michigan Energy Appraisal: Winter 2006/2007,” which has been published annually since 1978, the MPSC said it expects that energy supplies in Michigan will be adequate to meet anticipated demand.
“Compared to last winter, natural gas prices for home heating will be 12% lower,” the commission said. “Of course, weather that is colder, or warmer, than last year will affect actual monthly savings.”
The MPSC pointed out that even with a return to normal weather, residential bills should be lower. The commission added that natural gas prices are currently down 12% from last winter’s average. The report pointed out that the National Weather Service is projecting a better than 70% chance of normal or warmer than normal weather this winter, adding that over the last four heating seasons, temperatures have averaged 3% warmer than normal.
“Customers of all Michigan gas utilities will see lower bills this winter,” the commission said. “Statewide, monthly bills could be about $20 less than last year, assuming normal weather.”
According to the MPSC’s calculations, total annual natural gas sales in Michigan for 2006 are projected to be 809 Bcf, almost 9% less than the 2005 total of 887.3 Bcf. The report added that consumption during the first part of 2006 was down due to much warmer than normal weather. The commission said Michigan natural gas storage levels are normally built up during the summer months and are projected to be at 603.5 Bcf in October 2006, about 90% of capacity, “which should be sufficient to meet anticipated demand for the coming winter.”
On the electricity front, the MPSC said the 0.8% drop in electricity sales for the year is a result of milder summer temperatures in the state when compared to 2005. Calendar year 2005 showed an electricity sales increase of 4% over 2004. “The outlook for this winter shows no supply shortages or transmission constraints that would impact the ability of Michigan utilities to meet winter peak electric demand,” the MPSC said.
As for distillates, the commission said 2006 deliveries are projected to decrease by 5.3% to 1.122 billion gallons. “The three principal factors affecting distillate usage in Michigan are industrial production, winter weather, and price,” the MPSC explained. “The average residential price in Michigan for home heating oil on Sept. 26 was $2.30 per gallon, down $0.45 per gallon from year ago levels and 3 cents since March 2006.”
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