Nov. 26--Michigan Consolidated Gas will raise its rates by about $6 a month for residential customers beginning Jan. 1.

But a projected decrease in consumption of natural gas for heating and a slide in the price of natural gas will result in a $17-per-month average savings for homeowners, meaning heating bills will decline, on average, by about $11 a month next year.

The utility, a subsidiary of DTE Energy, hasn't had a rate increase in five years, said Mark Spiers, vice president of gas sales and supply for MichCon, "but the cost of routine capital maintenance is north of $100 million, and we need to be able to recover those funds."

MichCon filed a request with the Michigan Public Service Commission in June, asking for a $193-million rate increase. The updated hike request filed Wednesday with the PSC was for $170 million.

Under sweeping new energy legislation passed last year in Lansing, utilities can automatically implement an increase onto bills six months after the initial filing. But the PSC could come back before June and modify the rate hike. If the PSC rejects or reduces the rate hike request, MichCon will have to pay refunds and penalties to its customers.

The average monthly bill for MichCon's 1.2 million customers was $178 a month last year. The projected average for 2010 is $167 a month, Spiers said.

Contact KATHLEEN GRAY: 313-223-4407 or kgray99@freepress.com

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