ADRIAN — A combination of proposed rate changes this fall, pursuant to regulated natural gas rates for Citizens Gas Fuel Co. in Adrian, was approved Nov. 28, and customers should expect to see some savings on their annual gas bills this winter.

When Citizens Gas and Adrian’s Gas Commission met Nov. 28 to review the data and rates for providing natural gas to residential and commercial customers, it was the culmination of several meetings between the local energy company and the city to determine the most appropriate rate change for Adrian-area customers.

The regulated rates under review included the monthly customer (basic) fee and the distribution fee, Joe Lucey, accounting manager for Citizens Gas, said.

“The last time these rates were changed was 14 years ago on Jan. 1, 2010,” Lucey said.

The last time Citizens Gas met with the city for a true rate case was in 2009, which led to the amending of the customer and distribution fees in 2010.

Citizens Gas also is announcing a decrease in the annual gas supply charge of $0.38, resulting in a 28% overall decrease in costs to customers. The gas supply cost is determined every year, based on what Citizens Gas paid during the past year and anticipates paying in the coming year.

With the combined rate changes, the average residential customer will save approximately $300 annually on their gas bill in normal weather conditions, Citizens said.

“Monthly gas bills will vary month-to-month, depending on usage,” Lucey said.

Some of the reasons as to why Citizens has been reviewing increases to its customer and distribution fees are because of inflation, the cost of wages and benefits having gone up, regulatory requirements that are now more significant than they used to be, and retirements of Citizens’ employees, which has seen a 60% turnover of its personnel within recent years, Lucey said.

“We’ve had to just keep up with the requirements to make the system as safe as it can be with the latest information and regulations from either the Michigan or the federal government,” Lucey said during his latest presentation/appearance in front of the Adrian City Commission, Nov. 20.

Talks about the rate changes began as early as September when Lucey first appeared in front of the commission. Those talks concluded with the Nov. 28 meeting with the Adrian Gas Commission. The new rates went into effect this month, Dec. 4, starting with customers’ December bills.

Adrian’s own local gas commission acts like how the Michigan Public Service Commission does with bigger utility companies.

“We review the requests with the assistance of a consultant and determine whether that request is justified,” Adrian City Administrator Greg Elliott, who also serves as the city’s appointed gas commissioner, said. “There’s only two people (involved in the process) one appointed by Citizen’s Gas and one appointed by the city. If we agree, we agree. In the past, they have always just agreed. There is a dispute resolution mechanism if there’s not an agreement on it.”

The fee hike boils down to two phases, Lucey discussed with the commission in November. The first phase includes an increase of $41 annually — or 6% — to the distribution and customer fees paid by residential customers, and a $119 increase — or 4% — of those same fees paid annually by commercial customers.

The second phase of the increase will go into effect after a new 8-inch steel pipeline is commissioned into service, estimated around November 2025. Once the pipeline is in service, customers will see another increase, projected at $15 more per year for residential customers and $55 more per year for commercial customers when looking at the customer and distribution fees.

Citizens has an existing line that runs along Howell Highway from the campus of Siena Heights University down to North Adrian Highway (M-52). A six-inch steel line was converted from intermediate pressure to high pressure and that was completed during the summer/fall.

The 8-inch line will be placed from Howell Highway and M-52 into private yards, through some fields and over to Moore Road, starting west of M-52 and going out to Tipton Highway where a regulator station will be installed to feed the northwest end of the system, and provide additional natural gas feeds for the ProMedica Charles and Virginia Hickman Hospital area.

With a lot of residential and business expansion going out west of Adrian, dedicated pressure needs to be relayed out that way, Lucey said, which explains why the capital projects will be taking place.

Citizens Gas is headquartered in Adrian at 127 N. Main St., in the downtown, and serves 17,800 homes and businesses in Lenawee County. It is a wholly owned subsidiary of Detroit-based DTE Energy and has a local franchise agreement with Adrian that has been in effect for some time.

“We feel we have a very equitable product and process,” Lucey said.

The city of Adrian regulates Citizens’ natural gas rates, which is made up of the customer fee, the distribution fee and the gas supply charge.

Subscribe Now: For all the latest local developments, breaking news, and high school and college sports content.

In 1995, a vote was sent before the public asking if residents wanted Citizens to remain as Adrian’s supplier of natural gas. That vote passed by more than 60%, Lucey said. That same vote is coming back before the voters in 2025.

Citizens Gas Fuel Co. has been providing gas and electricity utility services since 1856.

For information about energy savings tips to reduce natural gas bills and costs, visit citizensgasfuel.com/cost-reducing-tips.

“By putting it to the electorate, it can be an exclusive franchise,” Elliott said. “If it’s not, then it is revocable at will by the city commission.”

— Contact reporter Brad Heineman at bheineman@lenconnect.com or follow him on X, formerly Twitter: twitter.com/LenaweeHeineman.

This article originally appeared on The Daily Telegram: Rate changes in Adrian-area gas supply approved; expected to decrease