Michigan natural gas rates

Natural gas is an important part of everyday life. So it's nice to know that you can rely on MGU to keep your business comfortable.

You can also count on us to provide the information you need to manage your energy costs. A good way to start is by understanding the rates you see on your monthly natural gas bill.

Who is this rate for?

Most businesses served by MGU receive Commercial and Industrial Firm Natural Gas Service. Commercial and Industrial Firm Natural Gas Service is designed for businesses, schools and government facilities.

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How reliable is my natural gas service?

Natural gas is available to you whenever you need it. The only exception — as with any gas service — is when unexpected events occur (such as a severe storm or a contractor digging into a gas line) that make it impossible to deliver gas to your business. When this happens, MGU responds immediately to restore service.

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How is the natural gas I use measured?

The amount of gas flowing through your meter is measured in hundred cubic feet (CCF). Your bill shows how much gas (CCF) your business used for the past month.

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What charges are involved?

Each month your bill for commercial and industrial gas service includes:

  • Distribution Charge, covering the cost of delivering gas to your business on the MGU system. This charge varies with the amount of gas you use each month. Your bill shows the volume of gas used multiplied by this cost. See the table below for current rates for Local Distribution Service.
  • Gas Cost, covering the estimated cost of gas and all related costs for ensuring a reliable gas supply for our customers. It also includes contract costs for securing:
    • adequate pipeline capacity to transport gas to this service area, and
    • adequate storage space for gas until it's needed.

    MGU annual estimated costs are spread out evenly over 12 months and listed as the Gas Cost on your bill. This charge varies with the amount of gas you use. You pay $0.43275 per CCF for the gas you use. This is what MGU pays for the gas — we do not mark up or profit from the price of gas.
    The Michigan Public Service Commission approves estimated Gas Costs. At the end of the year, the commission compares actual gas costs with the revenue collected from customers. The commission determines if too much or too little was collected and considers this information as it sets Gas Costs that MGU may charge for the next year.
  • Customer Charge, a fixed charge that does not vary with the amount of gas you use. The Customer Charge covers the cost of providing safe, reliable gas service. It includes the cost of MGU owning, maintaining and reading meters; maintaining equipment; and providing service programs and communication services. The Customer Charge is the minimum amount you will be billed each month. See the table below for current Customer Charge amounts.
  • Reservation Charge, this charge allows for the recovery of costs related to the assets necessary to provide peak-day coverage and for MGU to serve as the "supplier of last resort", as required by the Commission in Case No. U-15929. The current Reservation Charge is $0.07327 per CCF. For GCR purposes, the Reservation Charge is a component of the Base GCR factor. This Reservation Charge is included in the Gas Cost Charge of $0.43275 per CCF.

Charges on your gas bill

Annual natural gas usage (Customer Class)1 Type of customer Daily customer charge Local distribution service rate4 Gas cost charge3 Commodity charge2
Small general service Year-round
$1.30062 $0.16660 $0.43275 $0.58909
Large general service Year-round
$19.1145 $0.11112 $0.43275 $0.53923

1 Charges occur monthly.

2 Charges occur monthly. This includes all surcharges.

3 Includes Reservation Charge.

4 Includes Gas Supply Acquisition Charge plus Distribution Rate.

Several factors can influence your business's monthly gas use. Major factors that can be measured by MGU are summarized in the lower left-hand corner of your monthly bill.

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