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Published: Saturday, 7/19/2008

Southeast Michigan consumers may see higher heat bills


Customers of Michigan Gas Utilities Corp. have been warned by the utility to prepare for increased heating costs this winter unless natural gas prices decline soon.

Higher costs could affect more than 50,000 customers in southeast Michigan, including 45,000 in Monroe County, utility officials said.

Natural gas rates this summer are about 20 percent higher than a year ago, and the winter season could be worse, company spokesman P.J. Livernois said.

"Summer natural gas market prices are higher now than ever before. If that trend continues, we'll see heating costs this winter hundreds of dollars higher than last year," he said.

On the New York Mercantile Exchange, natural gas prices closed at $10.69 per 970 cubic feet, up about 60 percent from this same time last year.

According to the utility, high prices are because of speculation in the marketplace, increased demand for natural gas, and forecasts for a busy hurricane season this year.

"Natural gas is tracking the price of oil," Mr. Livernois said.

A major factor in higher prices is that several gas utilities expended their gas reserves during the exceptionally cold Michigan winter last year, Mr. Livernois said. The utilities are now buying high-priced gas to restock their reserves and that price could be passed on to consumers, he added.

Unlike Ohio, Michigan consumers can't buy gas from suppliers other than their incumbent gas utility.

Although it is July, Michigan Gas Utilities is advising customers to apply for energy assistance now and begin a budget payment plan in anticipation of higher rates.

Contact Ted Fackler at:


or 419-724-6199.

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