Sunday, October 11, 2009

Detroil Natural Gas Heating Bills Projected Lower in 2009

Michigan winter utilities costs fall
Natural gas, oil price slides lead to lower bills for consumers
Christina Rogers / The Detroit News

Flipping on the furnace this winter is going to cost Michigan residents a little bit less.

Consumers can expect to pay an average 12 percent less for natural gas this winter, and heating bills could be down as much as 16 percent, according to a report released Friday by the Michigan Public Service Commission. That could translate into hundreds of dollars in savings this winter with utility customers paying an average of $30 less a month, compared to last year.

"There are a couple bright spots this year," said Judy Palnau, spokeswoman for the state's public service commission.


Natural gas and oil prices have been sliding due to supply outpacing demand in the global markets, she said. Prices also benefitted from the lack of hurricanes this summer, which have curtailed refinery supplies in previous years and sent oil prices soaring.

Petroleum prices also are expected to remain stable because the global recession has curbed demand for oil, according to the Public Service Commission's, Winter Energy Appraisal report the group puts out each year. In early October, gasoline prices averaged about $2.45 a gallon, down substantially from their record high in summer 2008 of $4.21 a gallon.

Propane prices also have fallen dramatically. Homeowners can expect to pay about 28 percent less this year for propane, bringing their bills to $1,391 for the five-year period between November and March.

In Michigan, 78 percent of homes are heated by natural gas, 9 percent by propane and 7 percent by electricity.

But for the 4 percent of Michigan homes that use heating oil, there's bad news. Heating oil customers will see their bills rise slightly, from $1,252 between November and March in 2008 to $1,302 this year.

Lower prices, however, may not last for long. MichCon and Consumers Energy are seeking state approval to raise rates on natural gas bills. At this point, it's unclear by how much those prices will go up and will depend on what state utility regulators decide, Palnau said.

The report also predicts electricity sales will decrease this year because cool summer months and fewer customers clicking on their air conditioners this year.

Monthly electricity bills are expected to stay the same or increase slightly if Consumers and Detroit Edison get approval from the state to raise rates.

In addition to lower heating bills, forecasters anticipate a milder winter that could further help reduce the need for heating fuel. The falling prices also could provide some much-need relief for local businesses struggling to survive the recession.

"In this economy, any break a small business can get on their costs is going to be positive," said Michael Rogers, a spokesman for the Small Business Association of Michigan, which has 6,400 members statewide. (313) 222-2300


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