LANSING, Mich. (Jan. 19, 2022) — Sen. Jeff Irwin (D-Ann Arbor) today introduced legislation to prohibit gas utilities from charging Michiganders for natural gas that was lost and unaccounted for (LAUF) in their rate case applications and/or rate adjustments.
Senate Bill 822 would lower Michiganders’ energy bills by ending the subsidization of the mistakes, lack of modernization, or weatherization by natural gas utility companies. Under current Michigan law, utility companies are allowed to recover the costs of LAUF gas, forcing consumers to foot the bill for a product commonly lost to old or damaged infrastructure.
“If DTE or Consumers can just pass on the costs for any gas they’ve ‘lost’, why would they fix their leaks and upgrade their technology or infrastructure?” Sen. Irwin said. “It doesn’t make sense why Michiganders are being forced to subsidize these corporations and pay higher rates because of gas leaks. Instead, we should incentivize them to fix their leaks and stop charging us every year for gas that leaks into the atmosphere.”
LAUF gas is the difference between the gas counted by the utility company’s system and the gas measured at the consumer’s meter. According to the American Gas Association, multiple conditions contribute to LAUF gas, including pipeline leaks, variations in temperature and meter reading timings, third-party damage, meter tampering, and/or when repairs and replacements are done to natural gas pipelines.
In 2018, Michigan had the 10th highest amount of LAUF gas in the nation. From April 2020 to March 2021, both Consumers Energy and DTE had more than 4.8 million lost units and were allowed to charge customers $11.6 million and $13.5 million, respectively, to make up for it.
“We need to ensure utilities are doing their part to maintain an updated, functional energy system,” Sen. Irwin added, “We need to hold companies accountable and incentivize them to fix their leaks rather than bill us every year for the gas lost in the system. Bottom line: my bill ensures that Michigan residents won’t have to keep paying for gas they never get.”
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