Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Wednesday, December 29, 2010

Reduce Your Gas Bill and Save a Few Dollars

With energy costs typically higher every year, it seems as though our gas and electric bills just get higher and higher each year. Recently, however, the price of natural gas has been dropping significantly as supplies have grown considerably. Consumers Energy gas price for residential customers was $7.3916 per MCF (thousand cubic feet) in December 2009. Currently the price is $6.9113 per MCF, a 6.5% decrease. Customers bills haven’t decreased that much because there are other fees that make up the total monthly gas bill.

So, if you don’t do anything and the weather in January and February is similar to last year’s weather, you can expect your bill to be a bit lower this winter. There’s a way, however, to lower it a bit more.

Residents in southeast Michigan who are customers of Consumers Energy (and perhaps other providers) have the option of receiving their natural gas from at least two other providers that we are aware of. One is IGS Energy and the other is Direct Energy. We assume that similar programs may be offered in other states.

We signed up with IGS Energy in September 2009 and received a guaranteed rate of $6.90 per MCF for the next twelve months. Although we didn’t keep my bills for the fall of 2009, in the last 12 months, there were only two months, in the summer, when Consumers Energy rate was less than the IGS rate. For the last 12 months, we have saved about $50 compared to what we would have paid for Consumers Energy gas.

We just renewed with IGS at a guaranteed rate of $6.19 for the next twelve months. Direct Energy is currently offering a guaranteed rate of $5.99. We don’t know much about Direct Energy, since we haven’t done business with them, so if you are interested in their offering, we suggest you check them out. Once you sign up with an alternative provider, you can cancel at any time. There are some rules with regards to cancelling and restarting, so we recommend you check them all out before committing.

We also recommend you keep a log of each month’s rate from Consumers Energy so that you can determine how much you are saving. You can find Consumers Energy current rate by clicking on the following link: Consumers Energy Gas Rate. While we had been comparing the rates, we weren’t diligent enough recently and only decided to check again when we received the offer from Direct Energy. We were able to switch to IGS’ lower rate over the telephone. We likely could have signed up for their lower rate a couple of months ago and saved even more.

You can contact IGS by calling 877-444-7427 and Direct Energy at 877-357-4675. We encourage you to ask lots of questions and make sure you are clear on all aspects of their programs before signing up. The new guaranteed rates for IGS and Direct Energy are 10.4% and 13.3% less, respectively, than the current Consumers Energy rate. Even if you only save $50 as we did, you can take your spouse out for a nice dinner. We think it’s worth a phone call.


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