October 11, 2005
October 11, 2005
LANSING – Governor Jennifer M. Granholm today put the state’s natural gas suppliers on notice that the Michigan Public Service Commission (MPSC) will be watching gas rates closely to ensure that customers have access to reliable, affordable energy to power their homes and businesses this winter. Under Michigan law, utility companies may not earn profits on the supply of natural gas sold to their customers. They can only earn a regulated rate of return on delivery of service. Granholm reminded the utilities that the MPSC will only grant increases to cover necessary costs.
“As the cost to provide natural gas to our citizens increases, I am reminding Michigan’s utilities that the MPSC will be watching closely to ensure that charges passed on are reasonable and appropriate – and no more,” Granholm said. “The MPSC must be vigilant in protecting our citizens’ pocketbooks, especially when costs of the things our citizens need most are on the rise.”
The Governor exhorted the companies to continue to enhance their efforts to reduce administrative costs so consumers can be assured they are paying for reliable energy, not for corporate overhead.
The MPSC today released its annual Winter Energy Outlook, indicating that natural gas prices will be higher in 2005 than in 2004. Given the steep increases in natural gas prices around the country, the price increases in Michigan are not surprising. Granholm noted that as of May 2005, Michigan’s natural gas rates are the 8th lowest in the country and the lowest in the Great Lakes region. Michigan leads the country in natural gas storage. That storage will insulate our citizens from major price swings that will likely be experienced by states that did not add gas supply or storage reserves. Price increases in those states are expected to be as much as 70 percent.
The Governor said, however, that those facts will be of little comfort to citizens in the face of steep increases in their utility bills this winter.
Granholm reiterated her commitment to join forces with the industry to secure critically needed increases in funding to protect our most vulnerable citizens from increases in natural gas rates.
Two weeks ago, Granholm led a bi-partisan group of 28 governors who asked Congress to fund a significant increase in LIHEAP (Low Income Home Energy Assistance Program). Last week, 49 U.S. senators voted to provide $3.1 billion in emergency LIHEAP assistance. While advocates for more LIHEAP funding did not prevail, the vote showed that a funding victory is within reach.
“Congress should not go home without putting real funding behind the amount they and the President just approved in the federal energy bill,” Granholm wrote. “I am thankful for your industry’s continued advocacy on this issue and know you will continue – as I will – to push for the protections our citizens deserve.”
The Granholm Administration has been a watchdog on energy issues with its most recent efforts focused on securing ample supplies of affordable gasoline in the wake of Hurricane Katrina.
Granholm released more than $1 million to hire additional inspectors to ensure that customers are getting the quality and quantity they are purchasing at the pump. The Governor also issued executive orders to lift restrictions and regulations so the state could ensure that all areas of the state would have adequate supplies of gasoline as well.
Finally, Granholm was successful in urging Marathon Oil to lower its price of gas to less than $3 per gallon, a move she applauded the refinery for taking. Late last month, Marathon began work on expanding its capacity at its Michigan refinery, a step that is expected to diversify and ensure gasoline supplies in the state.
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