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Winter Energy Appraisal finds growing demand and prices; financial help available for Michiganders struggling with costs
November 21, 2022
Media contact: Matt Helms 517-284-8300
Customer Assistance: 800-292-9555
Michigan energy customers have options to help with higher energy costs – and a new web page to make it easier to find – amid energy market volatility that the Michigan Public Service Commission’s 2022-2023 Winter Energy Appraisal finds is driving higher prices amid increasing demand across energy sectors.
Demand for natural gas is expected to continue to rise, while residential electricity demand stays essentially flat, amid continuing high costs. Michiganders struggling with home energy costs have options for help, and a new MPSC energy assistance web page makes it easier for folks to find assistance.
The MPSC’s web page, www.michigan.gov/mpsc/gethelp, brings together, in one place, information and links to state and utility company programs that offer energy bill assistance to income-qualified households, including State Emergency Relief, the Michigan Energy Assistance Program, and the annual Home Heating Credit.
The web page includes links to contact info for all of the natural gas and electric utilities whose rates are regulated by the MPSC; many utilities offer payment programs, including those that help spread seasonal higher costs year round. The page also has information on home weatherization and other ways to help lower energy use.
Anyone needing help is encouraged to reach out to their utility or contact Michigan 211 by calling 211 or going to www.mi211.org. Michigan 211 is a free, confidential service that connects Michiganders with a broad range of assistance programs and services and other resources, including help with food, housing, transportation and home energy bills.
Major findings of MPSC’s annual winter energy outlook, released today, include:
- Natural gas consumption for all sectors is forecast to rise 13.8% in 2022, led by increased demand in the residential and electric power generation sectors. Residential demand is expected to increase 13%.
- Residential propane prices, starting in October, averaged $2.47 per gallon, an increase of 8 cents, or 3.3%, compared to last year.
- No. 2 heating oil prices started the 2022-23 heating season at $4.40 per gallon, an increase of $1.29 per gallon, or 41%, higher than last year.
- Demand for electricity is expected to rise 1.5% in 2022, with the largest growth in the industrial sector at 4.8%. Commercial demand is expected to grow 0.9% while residential demand is projected to essentially stay flat, at a 0.3% marginal decline. Residential electric rates edged up 2.3% year over year as of October.
- Midwest prices for gasoline are expected to average $3.89 per gallon in 2022 and $3.46 in 2023.
Here is the outlook by category of fuel:
- Demand: Total natural gas sales are expected to rise 13.8% in 2022 to 991.4 billion cubic feet (Bcf), assuming normal winter weather. Power generation, expected to increase 19.6% in 2022, makes up for a large part of the growth, reflecting increased industrial demand for electricity. Residential use of natural gas, which fuels 77% of Michigan’s home heating, is estimated to grow 13%.
- Supply: Michigan gas storage levels — the state has 10% of the nation’s available underground storage capacity — are expected to be 448 Bcf to end 2022, a decrease of 9.5% year over year. U.S. inventories were 3,580 Bcf as of Nov. 4, 1% lower than in 2021.
- Cost: The U.S. Energy Information Administration forecasted residential natural gas prices for the Midwest this coming winter are noticeably higher than the year before at $13.22/Mcf, a 29% increase.
- Demand: Propane is used for home heating by 8% of Michigan households. Current federal weather forecasts call for slightly below normal temperatures this winter heating season, and weather is the chief determinant of demand.
- Supply: U.S. propane production remains strong. U.S. inventories are at 85.5 million barrels, 19% higher year over year. Midwest inventories were 7% lower than the five-year average.
- The U.S. Energy Information Administration forecasted residential propane prices for the Midwest this coming winter are projected to average $2.32 per gallon.
- Demand: Michigan’s total electric sales for 2022 are projected to rise 1.5% to 100.89 terawatt-hours (TWh) compared to 99.4 TWh in 2021. Sales are expected to rise in all sectors except residential, which is expected to decline 0.3%, barring abnormal weather.
- Supply: No supply shortages or transmission constraints are expected.
- Prices: Year-over-year changes vary significantly by utility. DTE Electric Co.’s prices were 2% higher in 2022 than in 2021, and Consumers Energy’s prices declined 1.7% over the same period. Owing in part to lower population densities and constraints imposed on the local grid by surrounding electrical generation and transmission systems, portions of the central and western Upper Peninsula continue to pay the highest rates in the state.
- Supply: As of November 4, the Midwest held 45 million barrels of gasoline inventories, 500 thousand barrels more than this same time last year. On a national level, gasoline inventories are 3.3 percent lower than last year and below the five-year range for this time of year.
- Prices: A gallon of regular unleaded gasoline in Michigan on Nov. 15, 2022, averaged $3.99 compared to $3.40 the year before. Midwest retail regular grade gasoline prices are expected to average $3.89 per gal for 2022 and $3.46 per gal in 2023.
Demand: Use of distillates for home heating continues to decline in Michigan, estimated now at 35,680 homes compared to nearly 77,000 in 2010.
Supply: Midwest distillate stocks as of Nov. 4 were at 24.5 million barrels, 4.6 million barrels lower year over year. National inventories were at 106 million barrels, 18 million barrels lower than in 2021.
Prices: On-highway diesel fuel is expected to average $5.08 per gallon for 2022, $1.79 per gallon higher than in 2021, and estimated to pull back to $4.65 per gallon in 2023. AAA Michigan found the average diesel price in Michigan at $5.54 per gallon on Nov. 15, 2022, $2.00 higher than the year before. The average cost of heating oil was $5.11 per gallon as of Nov. 7, 2022, $1.96 per gallon higher than the same time last year.
Read the full Michigan Winter Energy Appraisal.
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