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Expect Higher Heating Bills
LANSING — Michigan residents can expect to see a sharp increase in their home heating bills this winter due to record natural gas prices, but they’ll still pay less for natural gas than consumers in other parts of the country.
The Public Service Commission of Michigan’s Department of Labor & Economic Growth predicts that monthly heating bills for natural gas customers in Michigan will be an average of 46 percent higher than heating bills last winter. Natural gas prices are expected to average $12.30 per thousand cubic feet (Mcf) during the winter months, compared to $8.42 last year.
The typical residential gas customer can expect to see a 38 percent jump in their annual gas bill from a total of $944 last year to an estimated $1,298 for 2005-2006. Those calculations are based on a 12-month period ending in March each year.
The Michigan Public Service Commission attributes record natural gas prices this winter to the lingering effects of Hurricane Ivan in 2004 and the impact of hurricanes Katrina and Rita this year, which caused major service disruptions in oil production in the
As of Oct. 6, a total of 3 million barrels of refining capacity remained shut down because of the recent hurricane activity, so the oil supply will stay tight until
Assuming “normal” winter temperatures, the state’s natural gas consumers can expect to see their average monthly heating bill increase from about $128 last winter to $187 this winter, the agency estimates.
According to the federal Energy Information Administration, more than 70 percent of households in the
Residents who rely on heating oil or propane to heat their homes will feel the pinch of higher heating costs, too, according to the commission. The agency points out that in March of this year, the average residential price of No. 2 home-heating oil was $2 per gallon. As of early October, that average had increased 38 percent to $2.75 a gallon. Approximately 8.1 million of the 107 million households in the
Electricity sales in the state are expected to increase 2.9 percent in 2005 vs. a slight decline in 2004. The commission attributes the sales increase to the warmer than normal weather seen this past summer. A decrease in industrial sales caused by reduced economic activity, however, offsets part of the sales increase, the agency notes. The agency doesn’t foresee any supply shortages or transmission constraints on
Incidentally, the commission has ordered
On the vehicle fuel front, gasoline prices nationwide are projected to be in the $2.50 to $2.60 range for all of next year.
The agency points out that if diesel fuel prices continue to increase as they have in the last year, the added cost for diesel fuel in
According to the commission, the estimated retail gas prices and home heating bills cited in its report are based on the weighted average prices for all