Consumers Energy recently filed its annual plan with the Michigan Public Service Commission to predict natural gas prices for the upcoming billing year.
The plan would fix the upper limit of natural gas at 35 cents per 100 cubic feet, a decrease from the 46.9 cents per 100 cubic feet rate ceiling for the current budget year.
The proposed drop comes as a surprise to customers, who recently saw rates increase for the month of January, said Amanda D’Angelo, a international relations senior.
“Yeah, it’s high,” she said. “What I have to work with is within a budget and telling people not to turn up the heat because of the bill.”
Michigan Consolidated Energy raised prices in January from 36.2 cents per 100 cubic feet to 43.8 cents per 100 cubic feet. Consumers Energy customers saw an increase but only to 36.8 cents per 100 cubic feet.
Both companies remained under their ceiling approved by the Michigan Public Service Commission.
The plan would ensure that customers would not see gas rates that high in the next winter without a refund at the end of the year.
“If we say that between now and the end of the heating season, if we think that it’s going to be 38.6 cents between now and then... and gas drops to 37 cents then we refund the amount,” said Garth Behrendt, public information director for Consumers Energy.
The plan needs the approval of the Michigan Public Service Commission, which will begin its preliminary hearings on Feb. 4.
The supplies and costs of the plan will be examined before a decision can be reached by the commission.
“The intent is that the company can collect their costs but they are not allowed to make a profit on that gas,” said Mary Jo Kunkle, spokesman for the Michigan Public Service Commission.
Utilities are required annually by law to submit their plans for the following year, detailing the expected supplies and costs, along with the ceiling rate.
The proposed plan would take effect April 1, a check to ensure that customers are covered by the same plan throughout the winter, Jeff Holyfield, spokesman for Consumers Energy, said.
“You won’t run into a situation where your gas prices can change right in the middle of winter,” he said. “It’s really designed for the customers.”
The favorable price of natural gas contributed to the lower proposed ceiling rate, Holyfield said.
“We’re taking advantage of the low prices now and putting it under contract,” Holyfield said. “Once you have it under contract, you always know where you’re at.”
The long-term contracts will further stabilize an already forward-oriented gas situation.
Compared to some natural gas companies, Consumers Energy has a larger storage capability, providing some breathing room if rates increase, Holyfield said.
“When the price is low, we can stick it in the ground and have it around in the winter when the demand for it is greatest,” he said.
The long-term planning would combine to help ensure a small drop in rates for off-campus students, a decrease D’Angelo said wouldn’t affect her much, but could be of use to those struggling to pay the bills.
“For people who can’t afford to pay it... it’ll help,” she said.
