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Michiganders can expect slightly lower costs for gasoline, natural gas and diesel fuel and home heating oil this summer, but some customers have seen an increase in electricity costs, the Michigan Public Service Commission’s 2024 Summer Energy Outlook found.
Residential electricity demand is expected to rise this summer, while home demand for natural gas is expected to decline, according to the MPSC’s annual summer energy forecast out today.
Here are projections from the MPSC’s Energy Security Section for energy supply and demand in Michigan for summer 2024.
ELECTRICITY
- If typical weather patterns hold, total electric sales are expected to increase 1% to 98.5 terawatt hours (TWh), up from 97.5 TWh in 2023, driven primarily by a 2.8% increase in residential demand and a 0.8% increase in the industrial sector, with a 0.5% decrease anticipated for the commercial sector. Summer 2023 had 26% fewer cooling degree days than historical averages, indicating a slightly cooler than normal summer.
- Median residential electric rates increased 3.9% for customers of investor-owned utilities between May 2023 and May 2024.
NATURAL GAS
- Natural gas demand in Michigan is expected to rise 7.3% in 2024, fueled by growing demand from the electric generation sector and a projected 5.5% increase in residential demand. Federal forecasts call for an 8.4% warmer summer than historical averages, which would increase demand for electricity generation at the same time utilities increasingly are switching fuel sources at their power plants to natural gas from coal.
- The U.S. Energy Information Administration (EIA) expects Henry Hub natural gas prices to average $2.27 per thousand cubic feet (Mcf) for 2024, a 13.7% decline year over year, and then rise to an average of $3.21/Mcf in 2025.
- Natural gas storage levels in Michigan are projected to be about 576 billion cubic feet at the end of 2024, a 2.8% increase from the previous year.
GASOLINE
- Gasoline sales are expected to decline 1.1% in Michigan in 2024.
- According to AAA Michigan, the average price statewide for a gallon of regular unleaded gasoline on June 14, 2024, was $3.57, down from $3.63 a year earlier.
- The EIA projects Midwest regular-grade gasoline prices will average $3.48 per gallon during the April-September driving season, down from $3.54/gallon in 2023. Midwest regular-grade gasoline prices are forecasted to average $3.34/gallon for all of 2024. Unforeseen refinery outages, international political unrest, adverse weather conditions or other disruptions to supply could lead to higher product prices.
- National gasoline inventories are in the lower half of the 5-year range for this time of year. For the week ending June 7, U.S. total gasoline inventories were at 233 million barrels (26 days of supply), up 13 million barrels from the same date in 2023. Midwest inventories were at 48.5 million barrels, about 5.6 million barrels higher than last year.
PETROLEUM
- U.S. crude oil production averaged 12.93 million barrels per day (b/d) in 2023 and is expected to increase to 13.2 million b/d for 2024 and up to 13.73 million b/d in 2025.
- U.S. crude oil stocks are currently 7.4 million barrels lower than a year ago as demand has outpaced supply additions. As of June 7, 2024, the U.S. had 460 million barrels in inventory, an 1.5% decrease from 2023.
- The EIA projects that West Texas Intermediate crude oil will average $83.05/bbl for 2024 and $80.88/bbl in 2025.
DISTILLATE FUELS
- No. 2 heating oil prices ended the 2023-24 heating season at $3.57/gallon, a cent lower than the year before.
- The EIA expects retail prices for on-highway diesel fuel will average $3.99 per gallon for 2024, down $0.22 from 2023. The EIA projects distillate prices will rise for 2025, with prices estimated to average $4.15 per gallon.
- According to AAA Michigan, the average price of diesel in Michigan was $3.68 per gallon on June 14, 2024, $0.27 per gallon lower than this time last year.
- For the week ending June 7, national inventories of distillate oil were 123 million barrels, about 9.5 million barrels higher year over year. Midwest inventories for the same week totaled 33.6 million barrels, 7.4 million barrels higher than 2023.
Among significant issues impacting the energy landscape in Michigan, the report notes that the state overhauled its energy laws in 2023, impacting requirements for utility long-term integrated resource plans, establishing a clean energy standard, increasing renewable energy and energy waste reduction standards, and granting the MPSC siting authority for eligible utility-scale renewable energy and energy storage projects under certain situations. The Commission has issued multiple orders on implementation of the energy laws.
Resources are available for Michigan families needing help with home energy costs. The MPSC’s one-stop webpage for utility help provides information in financial assistance, payment plans, consumer protections and other options. For information, go to www.michigan.gov/mpsc/gethelp. Those having trouble paying home energy costs also may contact their electric or natural gas utilities for information 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.
Energy assistance information also is available through the MPSC’s energy assistance consumer tip sheet. Utility customers also can help reduce their costs by using energy efficiently. The MPSC's consumer tip on beating the heat has suggestions on reducing energy use. The U.S. Department of Energy has additional spring and summer tips for saving energy.
For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the Commission on Facebook, Twitter or LinkedIn.
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