Michiganians can expect lower heating bills this winter.
A mild summer and decreased use of energy means a greater supply of resources for the cold months and lower heating bills, according to an annual energy appraisal released Wednesday by the Michigan Public Service Commission. That stands in contrast to much of the rest of the nation, where many can expect to pay more to heat their homes this winter.
The Michigan report shows demand for natural gas and electricity dropped after a summer that was 12 percent cooler than normal. As a result of low demand, natural gas sales are projected to drop 3.8 percent from last year. The projections assume normal winter weather and could change if some estimates of a cold, snowy winter come true.
“Generally speaking, the heating bills won’t be as high,” said Phil Flynn of the Chicago-based PRICE Futures Group. “It’s definitely a positive. For all the pain we went through on gas prices this summer, this is going to be a welcome respite.”
Electricity sales in Michigan are expected to decrease by a half-percent if weather conditions are normal. Increased auto sector production should cause a 1-percent rise in industrial electricity usage, however. The commission’s report, which did not offer price examples, also expects a 5.7 percent increase in propane use this year.
“It’s good news,” said Gary Kitts, executive director of the Michigan Public Service Commission. “Fuel prices are looking pretty good.”
It’s a different story outside of Michigan.
Nationwide, natural gas customers will see the biggest percentage hike in prices, coming after two years of historically low fees, the Energy Department said this week in its annual outlook for heating costs. Their heating bills should rise to an average of $679. That is about 13 percent higher than a year ago but still 4 percent below the average for the previous five winters.
Homes relying on electricity for heat, about 38 percent of the U.S., will likely pay about 2 percent more compared with last year.
For heating oil customers nationwide, there is good news and bad news in the Energy Department's annual outlook for heating costs. Their average bill should drop 2 percent, to $2,046. But that's still the second highest average on record, behind last year's $2,092.
Flynn said Michigan’s prices will remain low because not as much of the supply was used in the state’s cool summer months.
“Utilities anticipated a certain demand in the summer with everybody running their air conditioners,” he said. “They didn’t use as much, so the supply they had predetermined is going to be available for the winter.”
In Michigan, 77 percent of households heat with natural gas; 9 percent use propane; 8 percent use electricity; 2 percent use heating oil; and 4 percent use other fuels, the commission said.