I can’t seem to turn on the news or read a newspaper without seeing a headline about higher utility bills this winter. What’s the story?
With inflation affecting many of the items we are buying and goods we are using right now, it’s probably no surprise that it also is affecting the cost of natural gas and electricity, but that doesn’t mean it isn’t frustrating. We get it.
So, let’s break down some of the reasons people may see their bill increase over the next few months. Let’s also look at ways to help offset the increase.
Power Supply Cost Recovery (PSCR) charge – This is a charge electric customers see on their monthly bill. Think of it as the cost associated with generating and moving electricity over power lines. The PSCR cost is calculated based on how much electricity you use, which means it can fluctuate just like your energy use does.
Natural Gas rate and Gas Cost Recovery (GCR) charge – In November, natural gas customers will see an increase from a new rate as well as an increase in the Gas Cost Recovery (GCR) charge. The natural gas rate increase is necessary to continue modernizing our natural gas system. In addition to implementing new technology and processes, vintage pipes are being replaced to improve safety and reliability. We are also making crucial upgrades to reduce methane emissions – a greenhouse gas more potent than carbon dioxide.
The GCR is the commodity cost; this is a pass-through cost, meaning you pay what we pay for the natural gas. This doesn’t include any kind of mark-up. The GCR increase is due to rising natural gas prices caused by a variety of global economic factors.
Cold weather – Seasons they are a-changin’. So why does your bill seem to get so much higher in the winter? The simple answer is the colder the weather, the more your furnace works to warm your house. Even if you keep your thermostat at the same temperature – it still runs longer to heat your home, increasing usage and cost. And even if you’re a budget-conscious homeowner who follows guidance to schedule your smart thermostat to lower temperatures when you’re not at home…in general we tend to spend more time at home during the winter, so the furnace is working more frequently.
It’s important to remember while the impacts won’t be the same for everyone, it is not just our customers, or even Michigan residents that are experiencing the cost increase. Energy costs are likely to increase across the U.S. The National Energy Assistance Directors Association estimates home heating costs will rise more than 17% this winter.
So, that’s the answer to the question about higher bills this winter in a nutshell but I know it feels like a whole pile of nutshells (or something worse) and not something small like a single nutshell. The good news is there are things we are doing at Consumers Energy to help reduce costs and there are things you can do at your own home to help control your costs this winter, too.
Let’s start with us. We work hard to reduce the price you pay by buying most of the natural gas for your home and business during the off-peak months. In other words, much of the gas you’ll use to heat your homes this winter was purchased when demand was low, and therefore prices were cheaper, during the summer months. We then use our vast underground storage fields to store the gas until it’s needed this winter.
This next part is a partnership of sorts. We have put together tips for you to utilize this winter to help keep your energy use and costs down.
- Have your heating system tuned and inspected by a service professional. Heat losses from a poorly maintained system can range between 1-2 percent a year.
- Clean or replace your furnace filter often during the heating season. If your furnace can “breathe” more easily, it will use less energy.
- Dial your thermostat down at night and add an extra blanket for warmth.
- Make sure your attic, basement, garage and exterior doors are closed to prevent cold drafts from getting in and heat from getting out.
- Turn that ceiling fan on! Ceiling fans set at a slow speed push warm air away from the ceiling and move it around the room without creating a chilling breeze.
While taking steps to winterproof your home or reduce your energy use can be helpful, there are times when your bill still might exceed your monthly budget. We understand and we are here to help with a variety of programs and payment arrangements. To find out what would best work for your situation call 800-477-5050 or visit ConsumersEnergy.com/assistance.
We also recommend contacting 2-1-1 – a free service that connects people with available resources in their community. Whether you’re looking for utility bill support, food, shelter or mental health resources, 2-1-1 will put you in touch with local resources based on your situation.