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   Gas Customer Choice in Michigan
Comparison of Pilot Program Features
Presented by Michigan Public Service Commission Staff to compare Customer Choice Program details for pilot programs that are no longer in effect.  See also History of Transportation Programs.

Utility Consumers Energy Company Michigan Consolidated Gas Company SEMCO Energy Gas Company
Number of Customers 1,500,000 1,200,000 210,000 excluding Battle Creek Division

Term of Program 3 years: 4/1/98 thru 3/31/01 (replaced by Permanent Customer Choice) 3 years: 4/1/99 thru 3/31/02
(replaced by Permanent Customer Choice)
3 years 4/1/99 thru 3/31/02, extended to 9/30/02
(replaced by Permanent Customer Choice)

Customer Choice Rate Schedule
Experimental Customer Choice Rate CC Expanded Pilot Transportation Service Rate Expanded Aggregated Transportation Service
View Tariff Rate CC (PDF format 18K) EPTS (PDF format 24K) ATS (PDF format 34K)

Geographic Location. Entire service territory Entire service territory Entire service territory

Eligible Customers All current sales customers. Cannot be in Winter Protection Plan. All current sales customers. Cannot currently be shut-off for non-payment. Expand current ATS service to include residential sales customers.

Participation Cap (number of customers) Customer Cap Cust. Cap C&I Vol Cap Residential Customer Cap
1st year 100,000 75,000  10 Bcf 7,000
2nd year 200,000 150,000  20 Bcf 14,000
3rd year 300,000 225,000  30 Bcf 21,000
Total     41,000 customers over 3 yrs

Gas Cost Recovery (GCR) Impact GCR Suspended

Fixed Gas Rate of $2.8364 /Mcf for term of program.

current rates

GCR Suspended

Fixed Gas Rate of $2.95 /Mcf for term of program.

current rates

GCR Suspended

Fixed Gas Rate unbundled. Commodity charge $2.99 /Mcf (until GCR reinstated 4/1/02) plus $0.25 /Mcf balancing charges.

current rates

Customer Enrollment and Supplier Switching (1) Year around (1) Nov. 1 thru Feb. 28

(1) Year Around
  (2) No minimum term of service, customers may switch any time. (2) Minimum term of service is one year. All contracts terms ending 3/31. Switching allowed only during enrollment periods. (2) Minimum term of service is one year, renewable annually. Switching allowed on the annual commencement of service.
    (3) Multiple year Contracts are permitted.  

Switching Fees No fee for initial enrollment. Allowed one switch free within a 12 month period. $10.00 fee for each additional switch. No Fees No Fees

Returning to Sales Service
Anytime. Only during next enrollment period (or at supplier contract termination date) Only if minimum term of ATS (12 months) is met.
Rate when returning Gas rate will be the higher of $2.8364 /Mcf or market. Gas rate will be $2.95 /Mcf. Gas rate will be $2.99 /Mcf.

Supplier Requirements Execute an "Authorized Gas Supplier" Agreement with CE prior to soliciting customers. Commit to participate in Year Two of program. Pay a $1,200 non-refundable annual prepayment of monthly administrative fee. Enter into Supplier Aggregation Agreement by 3/15/99. Enter into an Aggregation Agency Agreement with all of the Shippers in aggregation group.

Supplier Administrative Fees $200 per month per supplier-designated pricing category. $100 per month (prepaid on an annual basis) $100 per month

Supplier Credit and Deposit Requirements

Requires a Performance Guarantee deposit equal to $6/Mcf x (ACQ/365) x 10.
[about $20.00/res. cust.]

Simple interest paid on deposits. Interest rate is the average short-term borrowing rate available to the company.

Perform credit check ($100 processing fee) to establish supplier credit line. If sufficient credit the deposit is waived.
Deposit equal to $10.00*(ACQ/365) *10

Interest paid semiannually on any cash deposits at MichCon's average short-term borrowing rate.

Meet the credit worthiness standards of the Up-Stream transportation provider from which supplier intends to delivery gas. If can't meet those standards, provide deposit, letter of credit, surety bond or financial guaranty from a parent company equal to the maximum potential financial liability. (Two times the highest month's gas usage times the bundled firm rates.)

Pipeline Capacity Assignment (on pipelines that deliver to utilities) No assignment. Suppliers are responsible for arranging their own transportation. No assignment. Suppliers are responsible for arranging their own transportation. No assignment. Suppliers are responsible for arranging their own transportation.

Customers may choose to have supplier bill for gas usage if supplier offers option.

Consumers will do all billing if requested.

MichCon does all billing. Customers receive one bill. SEMCO does all billing. Customers receive one bill.
Billing Fees (monthly): Suppliers obligated to pay $0.30 per customer regardless of billing option chosen. Suppliers obligated to pay $0.35 per customer. No fees.
Supplier Payments:

Consumers responsible for all credit and collection activities unless supplier does own billing.

Consumers will remit payment to gas suppliers 21 days after the end of month.

Supplier responsible for all collection activities in cases of customer defaults.

Customer payments for gas service applied first to MichCon regulated utility service, next to supplier charges.

MichCon will remit payments to suppliers twice monthly.

SEMCO responsible for all credit and collection activities.

SEMCO will remit payment to gas suppliers 21 days after the end of last billing cycle of the month.

Supplier Billing Pools No limit on number of billing pools per supplier. ($200 administration fee per month per pool) Limit of 15 billing pools per supplier. No additional administration fees. No limit on number of billing pools. No additional administration fees.

Operational Provisions
Consumers will notify supplier of its Daily Delivery Obligation (DDO) which will equal 1/365th of the estimated annual consumption of the billing pool. The DDO may be adjusted 10% due to abnormal weather or other conditions. Supplier's Daily Quantity(SDQ) is the daily flowing supply necessary to meet the estimated annual consumption needs of the supplier's customers.

SDQ = 0.3% of ACQ.


Jan-March - 100% of SDQ

Apr-Dec - 70% of SDQ


Sept-Nov - 100% of SDQ

Dec-Aug - 130% of SDQ

SEMCO will notify aggregation agent of its Daily Delivery Obligation (DDO). The DDO is based upon monthly historical usage patterns and normalized weather conditions. The company may change the DDO whenever necessary during any given month upon notice given 24 hour before nominations are due on the Up-Stream Pipelines.
Storage Allocation No specific storage allocations. Volumes delivered in excess of DDO are applied first to any prior under deliveries. Any remaining amounts are turned away or cashed out - at Consumers option. Premised on summer to annual consumption ratio applied to Allocation Equation. Minimum 10% of ACQ.

Storage Balances, never below zero, or greater than allocated amount. Minimum balance at March 31: 5% of ACQ.

No specific storage allocations. Balancing fees of $0.25/Mcf paid by customers for all balancing services.

Supply Equalization Charge A charge to compensate Consumers for its gas-in-storage purchased for customers who switch to a new supplier after April 1. The charge equals difference between Consumers $2.8364 and the supplier-specified billing price multiplied by the current month's increase in the amount by which the cumulative billed consumption exceeds cumulative supplier deliveries. No charge. Limited sign-up period each year. No customers switched after Feb. 28th. No charge even though customers may switch any time of year. DDO is determined on a monthly basis and anticipates that the supplier will be required to flow enough gas for the month.

Penalty Provisions Penalty fees paid if supplier fails to deliver at least 95% of DDO or if supplier is short more than one full day's DDO at month end.

Failure fees equal to $6.00/Mcf ($10.00/Mcf during declared supply emergency) plus higher of $2.8364 or highest spot price at time of failure.

Penalty fees for failure to meet SDQ or to meet month end storage requirements.

Level 1 - Severe failure which could jeopardize system reliability: $10.00/Mcf plus highest city gate price for the month.

Below Minimum Daily Quantity Jan-Mar or Below Minimum Storage Balance at month end.

Level 2 - moderate when MichCon incurs additional costs: $0.25/Mcf.

Below Minimum SDQ April-Dec or Above Maximum Jan-Dec. Or Above Maximum Storage Balance at Month End.

Imbalance penalty fees for any daily difference between the quantity of gas delivered and the quantity designated in the DDO.

Imbalance Penalty Fees equal to $10.00 per Dth and any up-stream penalties assessed by the pipeline to the extent SEMCO can identify the Aggregation Agent as the cause of the penalty.

Sales Taxes Consumers responsible for collection and remittance of sales tax. Sales tax applied to entire bill. Suppliers responsible for all sales taxes due on sale of gas. MichCon responsible for all Detroit Utility Users tax due on sale of gas. No sales tax charged on MichCon's delivery service. SEMCO responsible for collection and remittance of sales tax. No sales tax charged on SEMCO's delivery service.

Customer Choice Rates:
Customer Charge:
$6.50 /month $7.50 /month $7.00 /month
Distribution: $1.20 /Mcf $1.45 /Mcf $1.15 /Mcf
Balancing:     $0.25 /Mcf
Commodity Charge: $2.84 /Mcf $2.95 /Mcf $2.99 /Mcf (until GCR reinstated 4/1/02)
Total Residential Customer Unit Rate (Assuming 120 Mcf annual usage) $4.69 /Mcf

current rates

$5.15 /Mcf

current rates

$5.09 /Mcf

current rates

More Information Consumers Customer Choice MichCon Customer Choice SEMCO Energy ATS
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Updated: Nov 20, 2008