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Consumers' Gas Investment Plans Threaten Skyrocketing Heating Bills, Stranded Infrastructure in Michigan

Posted by Rory Coleman on Sep 18, 2023

Report from Strategen Consulting and Advanced Energy United calls on Michigan decision-makers to study changing market conditions and cost-containment strategies for natural gas.

LANSING, MICHIGAN – Consumers Energy customers may see their gas bills increase up to 50% over the next decade according to a new report.

The report from Strategen Consulting analyzed Consumers’ 10-year Natural Gas Delivery Plan, warning that the utility’s $11 billion of planned infrastructure investments is unjustifiable and stems from faulty analysis and profit bias. The report estimates that the planned investments, coupled with conservative predictions for reduced gas demand from trends in electrification and energy efficiency, could cause the average residential bill to grow as high as $130 a month by 2030 – up from $75 in 2021.

Consumers Energy plans to nearly double the value of their natural gas infrastructure by 2030, passing those costs along to a customer base that is predicted to remain stable. The report found that Consumers’ justification for these expenses was built on assumptions of evergreen low gas prices that have already been proven inaccurate. Additionally, Consumers’ investment plans ignore the falling costs of electric heating and competing technologies, largely due to market innovation and consumer incentives within the federal Inflation Reduction Act, which will replace some residential gas use. Gas utilities pass the costs of infrastructure investments along to their ratepayers. A shrinking customer base would shift costs onto those households uninterested or unable to transition away from natural gas use.

“This report demonstrates that Consumers Energy’s gas investment choices may be locking its customers into paying higher costs for many years to come, and that the utility’s decisions are standing in the way of electrification and efficiency investments that would benefit customers in the long-term,” said Citizens Utility Board of Michigan Executive Director Amy Bandyk. “Consumers Energy ratepayers should be very concerned about this report’s findings.”

"Programs to improve energy efficiency have already provided immense benefits to Michigan's households and businesses, at a low cost to utilities," said Carlee Knott, Energy & Climate Policy Coordinator for Michigan Environmental Council. "We must prioritize strengthening these programs as a way to ensure families can affordably power their homes and stay warm through the winter, rather than making costly, unnecessary investments to extend the life or expand the methane distribution systems."

Changing market conditions, alternative heating technologies, and energy efficiency are bringing rapid changes to the energy system. Utilities and regulators need processes to identify the most future-proof, equitable, and affordable investments in this turbulent environment.

“Policies like the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) are improving the economics of electrification and energy efficiency,” said Samarth Medakkar, Michigan State Lead for Advanced Energy United, a national business association. “Michigan needs to enable its Public Service Commission to pursue long-term planning to ensure reliable, affordable heating during cold winters while supporting innovation and access to technologies that may reduce customers’ bills.” 

“Consumers Energy’s strategy to double down on investments in its natural gas infrastructure – identifying $11 billion in new spending through 2030 while anticipating nearly no growth in customer count – is risky, unreasonable, and contrary to the interests of its nearly 2 million customers,” Brad Cebulko, Senior Manager at Strategen Consulting. “Since we conducted our analysis, Consumers Energy issued its 2022 Natural Gas Delivery Plan, which called for an even greater investment in its delivery system over the next decade. Therefore, the results of our study likely understate the likely impact to customers.”

Advanced Energy United looks forward to working with legislators and regulators to adopt strategies to provide greater transparency and stakeholder input into energy investments that will affect residents and businesses in the state for decades to come. 

Click here to download the full report. 

Click here to learn more about Advanced Energy United's work in Michigan. 

Topics: Press Releases, Michigan, Samarth Medakkar