November 30, 2005

The Michigan Public Service Commission (MPSC) today authorized Aquila Networks – MGU and Consumers Energy Company to charge new gas cost recovery (GCR) factors for their December through March 2006 billing period.

The MPSC noted that the recent and unanticipated increases in market prices for natural gas due to the hurricanes have placed utilities at risk to experience significant under-recoveries.  Further, the Commission noted that any delays in recovering these large increases would economically burden customers by requiring them to pay additional costs, plus interest, in the future. 

  “My fellow Commissioners and I are mindful that ratepayers face significant bill increases due to the spike in natural gas prices,” said MPSC Chairman J. Peter Lark.  “Therefore, the Commission staff has been directed to closely monitor gas prices for the remainder of the 2005-2006 GCR plan year and provide monthly reports to the Commissioners and notify us if it appears that the GCR factor has been set at an unreasonable level.”

In Case No. U-14400, the MPSC authorized Aquila Networks – MGU to charge a new GCR factor of no more than $11.30 per thousand cubic feet of gas for the remainder of its 2005-2006 GCR plan.  The new GCR factor means the average residential customer will see an increase during the winter heating months of 38 percent, compared to last winter.

The following parties participated in this proceeding:  Aquila Networks – MGU, Attorney General Michael A. Cox, the Residential Ratepayer Consortium, and the MPSC staff.

In Case No. U-14403, the Commission authorized Consumers Energy Company to charge a new gas cost recovery factor of no more than $10.10 per thousand cubic feet, for the December through March 2006 billing period.  The new GCR factor means the average Consumers Energy residential customer will see an increase during the winter heating months of 47 percent, compared to last winter.

Consumers Energy was also directed in its next GCR plan filing to make a specific proposal for a method to recover its accrued, if any, under-recovery through March 31, 2006, and to specifically address the need to modify its gas purchasing strategies and practices to mitigate the effects of severe gas market volatility on its retail customers. 

The following parties participated in this proceeding:  Consumers Energy Company, Attorney General Michael A. Cox, the Residential Ratepayer Consortium (RRC), the Michigan Community Action Agency Association, and the MPSC staff.

The MPSC is an agency within the Department of Labor & Economic Growth.

Case Nos. U-14400 and U-14403