• Why are natural gas prices so high?
• Natural gas prices are rising for the same reason the price of many other goods tends to rise: it's called "supply and demand." The amount of natural gas our country produces and uses is closely linked to the price of the gas. If the supply or demand for natural gas changes, a change in the price of the gas follows. Sometimes, even news about the supply of natural gas can cause its price to change.
   
  Over the past several years, the price of natural gas has risen steadily. That's because the use of natural gas has increased, but the supply hasn't increased at the same rate. Natural gas is popular for cooking and heating, and more power plants use gas to produce electricity. In addition, changes in weather can create short-term increases in the demand for gas.
   
  Despite rising prices, natural gas is still a good value. It's important to remember that the price of other fuels has risen as well. Many companies and organizations are working to make more natural gas available for the future, to keep costs affordable. One example is President Bush's recent Energy Bill, which encourages exploration of new natural gas sources.

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• How did hurricanes Katrina and Rita affect natural gas prices?
• Many of the country's gas rigs, which drill for natural gas, are located off the coast in the Gulf of Mexico, where hurricanes Katrina and Rita occurred. So it is true that the hurricanes stopped natural gas production and increased the cost of natural gas through this coming winter. But the hurricanes alone don't account for the gas prices that are being predicted for this winter.
   
  At Michigan Gas Utilities, we purchase much of our gas from Oklahoma and Canada—not from the Gulf Coast. We also purchase a large amount of our winter supply of natural gas during the summer months, before the hurricane season, and place the gas in storage. That gas is mixed in with gas at the current prices, and helps manage the costs our customers pay.

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• What is Michigan Gas Utilities doing to keep natural gas costs down?
• Like you, Michigan Gas Utilities doesn't like to see high natural gas prices. We know high costs are difficult for our customers.
   
  To help manage the effect of higher natural gas prices on our customers, we take the following steps:
   
• To prepare for winter heating seasons, we purchase the amount of natural gas that we are physically able to store (about one-third of our natural gas supply) during earlier months of the year—when natural gas prices are typically lower. These supplies are kept in storage until they're needed.
   
• We also avoid buying natural gas daily because of the volatility of the price. We buy natural gas in monthly blocks, locking in the price at the beginning of the month. This helps moderate price spikes caused by unexpected events such as supply problems or increased demand caused by extreme cold weather that occur within a month.
   
• Like other utilities, we don't mark up or profit from the price of natural gas. Our customers pay exactly what our company pays for the gas. We charge directly only for the delivery of the gas over our pipeline system, and we have been able to keep those charges low. In fact, the cost of gas delivery has risen at a rate that's significantly below the rate of inflation.

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• What can I do to manage my higher natural gas bill?
• There are some simple steps that customers can take to help manage their energy use and costs, including:
   
• Use energy more efficiently - Before the winter, customers should take steps to insulate windows, install programmable thermostats or add insulation. Additionally, lower your thermostat during the heating season and remember to change or clean furnace filters monthly. Learn more about your energy charges and what you can do to manage costs with all about my bill.
   
• Find a payment plan that works for you - Michigan Gas Utilities offers a variety of billing & payment options, including Budget Billing, which allows customers to pay an average bill monthly instead of seasonal high and low monthly bills.
   
  If you are already a Budget Billing customer, please be assured that the higher natural gas costs are already being factored into your monthly budget bill amount due.
   
• Ask about help with home heating bills - Help is available for low- and fixed-income customers who are having difficulty paying their heating bills. Find out if you're eligible for heating assistance offered through your state.
   
• Look for the STAR - If you are thinking about purchasing new natural gas appliances, make sure to look for the ENERGY STAR label to ensure that you are buying an energy efficient appliance.

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