December 05, 2024
Media contact: Matt Helms 517-284-8300
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The Michigan Public Service Commission’s Winter Energy Appraisal for 2024-2025 projects demand for electricity will increase among residential and commercial customers, while demand for natural gas over the heating season will stay flat among residential customers but otherwise increase because of rising demand for the fuel for electric generation.
The MPSC’s annual winter energy report released today projects overall electricity demand in Michigan will rise 2%, with demand for the residential sector up 3.8%, the commercial sector up 2.6% and the industrial sector declining 0.8%.
Consumption of natural gas is projected to increase 3.8%, owing mainly to rising use of natural gas as fuel for Michigan’s electric generation plants. Natural gas demand is otherwise expected to stay flat among residential customers while declining 2.2% in the commercial sector and 3.3% in the industrial sector.
The U.S. Energy Information Administration (EIA) forecasts that average electricity prices in the east north central part of the country, which includes Michigan, will increase 0.7% compared to the year before. The projected weighted average commodity price for natural gas for the upcoming home heating season, meanwhile, is expected to be $3.15 per thousand cubic feet (Mcf), down 10% from $3.50 per Mcf last winter.
Families having trouble with home energy costs are encouraged to reach out now for help. Information about financial assistance and other resources is available at michigan.gov/mpsc/gethelp, the MPSC’s one-stop webpage with 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 may 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.
Other significant findings from the MPSC’s energy outlook include:
Here is the outlook by category of fuel:
NATURAL GAS
Demand: Total natural gas sales are expected to rise 3.8% in 2024 to 1.09 trillion cubic feet (Tcf), assuming normal winter weather. Power generation gas usage, projected to increase 11.5% in 2024, is expected to drive the growth in sales, overriding declines in the commercial and industrial sectors and flat demand in the residential sector. Natural gas fuels about 77% of Michigan’s home heating.
Supply: Michigan gas storage levels are expected to be 528 billion cubic feet (Bcf) to end 2024, 5.8% lower year over year. U.S. inventories were 3,967 Bcf as of Nov. 22, 3.4% higher than in 2023. Michigan has 10% of the nation’s available underground natural gas storage capacity, more than any other state.
Cost: The projected weighted average commodity price for residential customers of regulated Michigan utilities this season is $3.15 per Mcf, 10% less than last year’s actual average of $3.50/Mcf.
PROPANE
Demand: Propane is used for home heating by 8% of Michigan households, and Michigan uses more propane for residential heating than any other state. Demand is expected to be the same as last year. Current federal weather forecasts call for near 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 96.7 million barrels, 2% lower year over year. Midwest inventories were at 27.5 million barrels, 10% above the five-year average.
Price: For the week of Nov. 25, 2024, the average residential propane price in Michigan was around $2.21 per gallon. The EIA reported that wholesale propane prices began the season at 93 cents per gallon, 6 cents higher than in 2023.
ELECTRICITY
Demand: Michigan’s total electric sales for 2024 are projected to increase 2% to 99.5 terawatt-hours (TWh) compared to 97.6 TWh in 2023. Sales are expected to increase in the residential and commercial sectors while decreasing in the industrial sector.
Supply: No supply shortages are expected by the independent system operators serving the state.
Prices: The EIA forecasts residential retail electricity prices in the east north central U.S. to average 16.31 cents per kWh for 2024, up 0.7% from the prior year. In Michigan, as in other states, prices vary by utility.
MOTOR GASOLINE
Demand: Sales in Michigan are expected to increase 0.3% in 2024, following a 0.8% decline in 2023.
Supply: As of Nov. 22, the Midwest held 45.1 million barrels of gasoline inventories, 1.3 million barrels less than a year ago. Nationally, gasoline inventories are 2.7% lower than last year and near the bottom of the five-year range for this time of year.
Prices: A gallon of regular unleaded gasoline in Michigan on Nov. 26 averaged $3.09 compared to $3.16 the year before. Midwest retail regular grade gasoline prices are expected to average $3.20 per gallon for 2024 and $3.06 per gallon in 2025.
DISTILLATE FUELS
Demand: Use of distillates for home heating continues to decline in Michigan, currently estimated at 37,302 homes compared to nearly 77,000 in 2010.
Supply: Midwest distillate stocks as of Nov. 22, 2024, were at 25.8 million barrels, 100,000 barrels higher year over year. National inventories were at 114.7 million barrels, 3.9 million barrels higher than in 2023.
Prices: On-highway diesel fuel is expected to average $3.76 per gallon for 2024, 46 cents per gallon lower than in 2023, and continue to decline in 2025. AAA Michigan found the average diesel price in Michigan at $3.66 per gallon on Nov. 26, 58 cents lower than the year before. The average cost of heating oil was $3.12 per gallon as of Nov. 25, 57 cents per gallon lower than the same time last year.
Read the full Michigan Winter Energy Appraisal.
For information about the MPSC, visit www.michigan.gov/mpsc, sign up for its monthly newsletter or other listservs. Follow the Commission on Facebook, X/Twitter or LinkedIn.
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