Natural Gas Rates for residential and business customers who purchase their gas from MichCon have three components:

1. Customer Service Charge - A fixed "non-gas" monthly charge that varies by type of service. It is for repairing leaks and administering billing.
2. Gas Distribution Charge - The charge to transport gas across MichCon's system for delivery to your home or business, including pipeline maintenance and gas storage. This is also a "non-gas" component and is dependent on the amount of gas you use during the month. The Distribution Charge rate on your bill is stated in $ per Ccf (hundred cubic feet). Note: effective Jan. 1, 2007 an Uncollectibles Surcharge was assessed to allow us to recover costs resulting from uncollectible debt expenses incurred during 2005.
3. Gas Cost Recovery (GCR) - The gas or commodity component, or the price you pay for natural gas itself, in $ per Ccf. The GCR rate is based on costs incurred by MichCon to purchase gas supply. It is the same price we pay. By law, we do not make a profit on the sale of natural gas. The GCR rate is approved by Michigan Public Service Commission (MPSC). Our revenues are derived from Customer Service and Distribution charges.

If you participate in the Gas Customer Choice (GCC) program, the gas component on your bill is represented by the GCC supplier charge. MichCon simply bills for this charge, collects payment and reimburses the GCC supplier. Gas Customer Choice customers should contact their alternative gas supplier with questions about their cost of gas.

Current Gas Rates

Because the Gas Cost Recovery (GCR) Rate can fluctuate on a monthly basis, the most current listing of gas rate and options can be found in this Rate Summary document. (pdf)

Gas Cost Recovery (GCR) Rate

The Gas Cost Recovery rate can change monthly and is the largest portion of a typical heating bill.

* Based on a five-year average residential heating bill

We evaluate the GCR factor every month to reflect the cost we expect to pay our suppliers. Once actual gas supply costs are booked, any cost adjustments over or under are factored into the GCR factor - an ongoing "true-up" process resulting in no profit to us. By law, the GCR factor is passed on to customers without any profit or markup. Customers pay what we pay for natural gas. The Michigan Public Service Commission reviews and approves the price we charge for gas.

Gas Supply Cost Factors

Like many other commodities, the price of natural gas is impacted by supply and demand.  Weather conditions have an impact.  Extreme or lengthy winters raise demand. Severe weather conditions, like hurricanes, can diminish natural gas production and impact supply.  All of these conditions factor in to the GCR rate.

MichCon does its best to cushion the impact of gas prices on our customers. We purchase and store large quantities of natural gas in the summer. This enables us to take advantage of seasonal pricing, when possible, and acquire gas when demand is lower. Because of this strategy, our gas costs are below the national average.

Natural gas continues to remain a good value when compared with other fossil fuels such as propane and heating oil, which have also gone up in price.