MichiganNatural gas prices to jump as much as 60 percent.

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Natural gas prices to jump as much as 60 percent. By: Frank DeFrank, Macomb Daily Staff Writer January 25, 2001 Consumers Energy, which provides natural gas service for most Macomb County residents, has asked the Michigan Public Service Commission for permission to charge up to $5.69 per thousand cubic feet of natural gas. First, the good news: Macomb County homeowners will not pay twice as much for nnatural gas beginning April 1.

The bad news: They will pay a lot more -- up to 60 percent more -- than they have for the past three years.

Consumers Energy, which provides natural gas service for most Macomb residents, has asked the Michigan Public Service Commission for permission to charge as much as $5.69 for a thousand cubic feet of natural gas, double the amount the company currently charges under a rate freeze.

But Jeff Holyfield, a Consumers Energy spokesman, said residents won't see their bills double.

"We're looking at a 40- to 60- percent increase for customers," Holyfield said. "We're hoping we can come in lower than that. But 60 (percent) would be about our top end."

Consumers' natural gas customers -- about 1.6 million in Michigan -- have paid $2.84 per 1,000 cubic feet since April 1, 1998. But that rate freeze expires April 1.

Holyfield said several factors dictate what Consumers will charge for natural gas when the freeze expires, not the least of which is "what goes on in the marketplace."

"We're hoping that natural gas prices go down," Holyfield said.

MichCon, which serves customers in Wayne and Washtenaw counties in southeastern Michigan, has requested it be allowed to bump its rates from $2.95 to $5.17, also beginning April 1.

Since MichCon's rate is frozen through the end of 2001, the company plans to offer credits to customers that will reduce the rate of increase to about 10 to 15 percent, said Cheryl Conway, MichCon spokeswoman.

Conway said the credits, which would appear on monthly bills, would average about $135 per year for MichCon natural gas customers.

Holyfield said a "typical" Consumers natural gas customer pays about $650 per year. A 60 percent increase would bump that figure to a little more than $900.

But, Holyfield added, delivery and service charges, which are added to monthly bills, will not be increased.

Rate increases must be approved by the Michigan Public Service Commission.

Although the price of natural gas will increase as soon as April 1, the real pinch will be felt next winter. Consumers officials said about 80 percent of a typical homeowner's usage is to heat their home.

"The real demand for natural gas is in the winter," Holyfield said.

That's what troubles Patricia Gibbs, executive director of the Macomb County Community Services Agency.

She said any increase -- whether 40, 60 or 100 percent -- hits those hardest who can least afford it: senior citizens.

"(The proposed rate increases) are extremely troubling to us," Gibbs said. "From time to time, (seniors) need a little help. If this goes into effect, it's going to have a big impact."

Gibbs said significant rate increases for essentials such as heat may force seniors into difficult choices.

"We have seniors tell us now that they only take the medications every other day (instead of daily)," Gibbs said.

The Community Services Agency may provide help to qualified seniors to pay for home heating. Utility companies offer similar programs.

"There is never a reason for seniors getting (their heat) shut off," said Wayne MacDonald, Macomb County area manager for Consumers Energy. "We want to work with them."

Seniors can find out if they qualify for home heating financial help by calling the Home Preservation and Energy Department of the Community Services Agency at (810) 469-6329. Consumers Energy offers similar help for its customers through the company's public affairs office.

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Fuel for thought

Utilities in Michigan anticipate increasing their natural gas rates beginning April 1, the day after a 2-year rate freeze is scheduled to expire. Here's a look at the proposed rate changes.

FROZEN RATES per thousand cubic feet:

Consumers Energy -- $2.84.

MichCon -- $2.95.

SEMCO Energy -- $3.24.

PROPOSED RATES per thousand cubic feet:

Consumers Energy -- up to $5.69.

MichCon -- $5.17.

SEMCO Energy -- unknown.

http://www.zwire.com/site/news.cfm?newsid=1322576&BRD=988&PAG=461&dept_id=141265&rfi=6

-- Martin Thompson (mthom1927@aol.com), January 25, 2001


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