BY CHRISTINA HILDRETH
Published November 14, 2005
With winter just around the corner and the ailing energy market scraping to stockpile natural gas for the winter, students who live in poorly insulated rental houses are dialing down their thermostats in hopes of avoiding big utility bills.
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"Last winter we kept the house at 50 degrees, trying to keep the bills down somehow," said LSA junior Allen Weiss, who lives in an off-campus rental house.
But when the icy weather arrives this year, dodging high bills may be unavoidable.
The price of natural gas - the fuel that heats most Michigan homes - has clambered to unprecedented heights since Hurricanes Katrina and Rita decimated natural gas wells in the Gulf of Mexico, paralyzing a supply already strained by ever-increasing demand. Southeast Michigan's natural gas supplier DTE Energy estimates the average residential heating bill this winter will be 46 percent higher than last year - a jump from $164 to $240 per month.
In response, the Michigan Public Service Commission, which regulates gas and energy prices within the state, issued emergency rules last month to help consumers avoid shutoffs and stay toasty in cold weather.
Effective Nov. 1 through Mar. 1, residential customers have five extra days to pay heating bills. Utility companies also cannot cancel service or charge late fees for failure to pay an estimated bill by the due date, as long as they pay the minimal fee.
Other new rules protect the elderly and poor from winter shutoffs.
MPSC also offers a budget payment plan to help customers distribute costs over the course of a year. The plan does not erase the winter cost spike but can lessen its drain on monthly finances, said Judy Palnau, spokeswoman for MPSC.
Len Singer, spokesman for DTE, urged students who anticipate trouble paying high bills to contact their utility company as soon as possible.
"Don't wait till a disconnection notice comes in the mail or someone shows up at the door for payment. We can work with customers for bill paying arrangements," he said.
Even with MPSC and DTE's programs, some students said they see little chance to circumvent high bills.
"What are you going to do about it? Even if prices are bad, you have to pay them. It's the market value," Weiss said.
Yet natural gas's soaring price tag does not immediately affect many students. Students living in residence halls and most apartments near campus do not pay for heat, which is factored into rent or housing costs.
That means University housing and landlords pick up the tab. Amy Kahn, manager of CMB Property Management, said her company began preparing its more than 20 locations near campus for the energy increase this summer by sealing apartments and checking furnace efficiency. Anxious to minimize high costs, CMB also installed programmable thermostats in most of its houses.
But that doesn't mean students will escape extra fees - some landlords have issued notices to residents indicating next year's rent increase will include dollars to cover this year's heat bills.
With all this money going toward energy, some consumers have blamed utility companies, accusing natural gas suppliers of pocketing profits while the public suffers.
But this is not the case, Singer said.
"We as a natural gas utility don't make any additional profit when the price of gas goes up. We sell the gas to customers at exactly the price we pay for it," he said.
Singer said that utilities normally purchase and store large quantities of natural gas at relatively low prices during the summer to keep costs under control during high-usage winter months. But this year's volatile gas market and devastating hurricanes have limited that effort, resulting in the current supply crisis.
Meanwhile, Weiss said he hopes his house will weather the high-cost storm.
"We're hoping that the improvements that our landlord made on our house will make the house more energy more efficient," he said.