MichCon customers to see heat bills dip

Sofia Kosmetatos / The Detroit News

MichCon customers in Metro Detroit will get some relief on their heating bills this winter, shelling out nearly $40 a month less than last year, when natural gas prices skyrocketed after Hurricane Katrina hit the Gulf Coast.

Barring natural disasters that could affect supply and drive the cost of natural gas higher, the average MichCon monthly bill is projected at $165 a month this winter, down from last year's $201.

Consumers Energy customers, meanwhile, should see a slight increase, from an average monthly bill of $163 to $168, according to early projections by the Public Service Commission.

The commission releases its annual winter energy appraisal in October.

Michigan Consolidated Gas Co., a unit of Detroit-based DTE Energy, serves 1.3 million customers in Detroit, southwestern Wayne County, Washtenaw County and other parts of Michigan. Consumers Energy has 1.7 million natural gas customers, mostly in Oakland and Macomb counties and the central Lower Peninsula.

The difference in last year's bills for customers of MichCon and Consumers reflected how Hurricane Katrina, which damaged both offshore platforms and onshore processing plants, affected each utility.

Consumers had a bigger supply of natural gas bought at lower prices before the hurricane, while MichCon had to buy more gas at prices that spiked after the hurricane.

Natural gas prices are about 50 percent below last year for several reasons, mainly because there hasn't been another storm of Katrina's magnitude. Also helping was last year's mild winter, which drove down demand.

Still, the levels are above what would have seemed pricey in previous years.

That's because demand generally has increased over the years, most quickly for generating electricity.

That's going to continue to drive the demand for natural gas, especially in states like Florida and California, where the demand for electricity is especially high, said Stephen Ewing, vice chairman at DTE Energy.

"We've seen prices rise to levels heretofore never imagined," he said.

Temperature's the key

Of course, when it comes to home heating costs this winter, a lot will depend -- as always -- on the weather, which determines just how much heating oil or natural gas consumers will burn. In Michigan, four of five homes use natural gas.

"What would really surprise this market is we have a good old-fashioned winter," said oil analyst Phil Flynn of Alaron Trading Corp. in Chicago. "Our winter temperatures have been above average for the past few years."

Michigan homeowners can take solace in the fact that they'll be paying among the lowest prices in the country if spikes occur, because of abundant underground natural gas storage capacity in natural reefs and a location that allows easy access to gas from different sources.

Homeowners have several options to reduce the impact of higher natural gas prices, starting with conserving their use.

"We've consistently had a message of conservation and energy efficiency," said Consumers Energy spokesman Jeff Holyfield. The message worked, he said, citing a 4 percent decrease in customers' natural gas consumption in the first quarter of this year from the same period last year. Going on a budget billing program that spreads out payments over the year instead of a few months is also a way to reduce the impact of higher prices.

Many DTE and Consumers Energy customers have taken advantage.

The number of DTE customers on budget plans rose by 25,000 from September to May. Consumers Energy had 19,000 more people sign up from July 2005 to July 2006.

Help's available, utilities say

Above all, the utilities urge customers who expect to have a problem paying their bill to call them for help.

"That was one of the messages that we had last winter," DTE spokesman Scott Simons said. "If you see yourself having a problem paying your bill, contact us. We'll work with you."

Low-income customers and seniors can enroll in the DTE's Winter Protection Plan, which prevents service shut-offs between Dec. 1 and March 31 as long as customers pay a portion of their estimated annual bill, plus make regular payments on any past due bills.

The state also has programs that can help low-income customers with their energy bills.

A private source for assistance is The Heat and Warmth Fund, or THAW, which works with community action agencies to help customers facing shut-offs.

Last year, THAW gave customers $9.2 million in energy assistance.

Last year, the especially high heating costs cut into how many people the agency could help, even as the amount of aid it has given out has grown, THAW Executive Director Kathleen Walgren said.

More families with moderate incomes are seeking help, she said.

"We're seeing a lot of people who have never had to seek (help) before."

Homeowner sets standard

For homeowners looking to conserve, John Glick is a good model to learn from.

The Farmington Hills potter lives in a farmhouse built in the 1870s, but because of energy efficient modifications and a programmable furnace, he hasn't been a victim of sticker shock.

"There's a ton of little, small efficiencies that can be dealt with," Glick said.

Over several decades, he and his wife added insulation in the attic, covered their old double-hung windows with internal storm windows and bought a highly efficient furnace. During the day, they dial down the furnace four degrees to 62 to help manage the bill even more.

Record-high natural gas prices led more people to upgrade their furnaces last year, said Cindy Forcier, a co-owner of Sylvan Lake-based Zilka Heating and Cooling Inc., a family business since 1946.

"People got scared," she said, noting many of her customers are on fixed incomes and couldn't afford bills that in some cases tripled.

The trend continued into the summer, she said, with more people replacing furnaces along with air conditioners.

At H.A. Sun Heating and Cooling of Bloomfield Hills, salesman Randy LaBelle said customers are being more proactive with replacing their furnaces in favor of more efficient models.

Carol Posby of Southfield called Sun Heating when her air conditioning system died a couple of weeks ago.

She upgraded her furnace, too.

Although Posby said her heating bill was only 15 percent higher last winter than the previous season, she was glad to upgrade to a more energy-efficient furnace, given the higher price of natural gas.

"There couldn't be a better time to do it," she said.

The Associated Press contributed to this story. You can reach Sofia Kosmetatos at (313) 222-2401 or skosmetatos@detnews.com.