January 2, 2008

 The Michigan Public Service Commission (MPSC) today announced that natural gas customers will see savings on their January bills, thanks to reductions in their gas cost recovery (GCR) factors, warmer than normal temperatures, and high storage levels.

Savings already began in October 2007, when temperatures were significantly warmer than normal.  The month of October had an average of 192 Heating Degree Days less than normal.  A heating degree day is measured by how many degrees the temperature falls below 65° F.

All natural gas utilities have GCR factors set below their authorized caps.  In addition, six out of seven utilities will further reduce their GCR factors in January, while one is keeping its the same as last month.  Statewide, the average GCR factor was $7.549/Mcf in December 2007.  In January, the average will be $7.4277/Mcf.  The GCR factor reflects the cost of natural gas.  Utilities do not make a profit on the cost of natural gas.

In addition to the weather, storage levels have also had a significant effect on the price of gas.  The nation began the heating season with record levels of gas in storage.  At the beginning of November 2007, storage levels were 8.4 percent above the five-year average.

"Once again, Michigan natural gas customers are benefiting tremendously from Michigan's natural underground storage capacity," noted MPSC Chairman Orjiakor Isiogu.  Utilities are able to purchase natural gas during the summer months, when it is cheaper and store it underground until it is needed.  This - along with warmer than normal temperatures - means big savings for customers.

"Customers can save even more by dialing down thermostats and making their homes more energy efficient," Isiogu added.  "Every degree dialed down can result in savings between 1 and 3 percent."

Additional energy efficiency tips are located on the MPSC's Be WinterWise Web site:  michigan.gov/bewinterwise or by calling the MPSC at 1-800-292-9555.

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