MPSC Approves Temporary Gas Cost Recovery Factor for Consumers Energy Company

Contact:  Judy Palnau, 517-241-3323
Agency:  Michigan Public Service Commission

May 2, 2014 -
The Michigan Public Service Commission (MPSC) today approved a temporary gas cost recover (GCR) factor for Consumers Energy Company.

Effective with the next full billing cycle until issuance of the Commission's final order in this proceeding, the utility is authorized to charge a monthly GCR factor of up to $5.575 per thousand cubic feet (Mcf).

The utility on Dec. 27, 2013 filed an application requesting to implement a base GCR factor of $4.3962 per thousand cubic feet (Mcf) for the 12-month period ending March 31, 2015. On Feb. 28, 2014, the company filed an amended application seeking a base GCR factor of $5.575 per Mcf. In its Feb. 28 filing, the utility noted the "significant, unanticipated increases in the market price for natural gas as a result of the Polar Vortex phenomena, extended periods of colder-than-normal weather occurring in Michigan and elsewhere in the United States and associated significant increases in demand for natural gas and natural gas send-out."

On March 7, the utility and the MPSC staff filed a joint motion for a temporary order approving the amended GCR factor for use in the April 2014 billing month and for immediate consideration. The joint motion noted that if the original GCR factor were adopted, it would result in an under-recovery for the 2014-2015 GCR year of approximately $185 million.

Noting the recent dramatic increase in the cost of natural gas, the MPSC on March 18 set an expedited schedule in the case. In approving the temporary GCR factor today, the MPSC notes that it will lessen the potential under-recovery and the associated interest that will fall on ratepayers and will help to shift some of the burden of recovery away from next winter, when usage is higher.

The GCR factor is a charge on a bill that reflects the actual amount of natural gas a customer uses. Regulated utilities make no profit from the sale of natural gas. The customer and the company pay the same price. For more information on understanding natural gas bills, visit the MPSC's consumer tips sheet, here.

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

Case No. U-17334

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