LANSING, MI - State Rep. Jeff Irwin, D-Ann Arbor, has introduced legislation aimed at ensuring utility customers aren't paying for unrepaired gas leaks.

Irwin said his introduction of House Bill 5913 comes after a recent economic analysis found that allowing utility companies to charge customers for wasted gas gives them less incentive to fix their systems.

"The public should not be subsidizing gas leaks," Irwin said in a statement. "Charging customers for gas that they never get picks their pockets and pollutes the environment."

Under Irwin's bill, utility companies still would be able to pass on to customers the cost of repairing and preventing leaks, but not the cost of the leaked gas itself.

"Instead of charging gas customers for polluting our air, we should put Michiganders to work fixing our infrastructure," Irwin said.

Dan Bishop, a spokesman for Consumers Energy, said Consumers Energy still is studying the proposed legislation.

Asked whether customers are paying for the cost of leaked gas, Bishop called it a de minimis problem, meaning it's too minor to merit consideration.

"It's an issue that gas utilities work to reduce to the extent possible, but the overall issue is safety and reliability," he said.

DTE Energy and Consumers Energy both emphasize on their websites that they take gas leaks seriously and include information on how to report them.

"DTE Gas is recognized as a nationwide industry leader for its quick response to reported gas leaks by the American Gas Association," the DTE site states. "DTE Gas strives to provide exceptional and safe service to our customers."

DTE's gas leak hotline is 1-800-947-5000. The Consumers Energy line for reporting gas leaks is 1-800-477-5050.

"We will respond promptly at no charge, 24 hours a day, 7 days a week," the Consumers Energy website says of gas leaks, encouraging customers to treat any natural gas leak as an emergency.

"Safety is paramount in terms of gas and electric service," Bishop said. "Costs to ensure safe and reliable operation are covered by all customers."

A spokesperson for DTE Energy couldn't immediately be reached for comment on Wednesday.

Irwin said the Michigan Public Service Commission regulates utility prices and, in turn, companies report their costs back to the MPSC to justify rate hikes.

Because gas companies can claim "lost and unaccounted for" gas, including known leaks and materials vented during maintenance, Irwin argues, not only are customers bearing the cost of leaked natural gas, but the public at large is then exposed to the negative environmental effects of pollution.

The issue was explored in a recent National Bureau of Economic Research paper by economists Catherine Hausman and Lucija Muehlenbachs.

"Price regulations are widely used to reduce inefficiencies from natural monopolies, but they can introduce other inefficiencies, such as the failure to cost-minimize," the NBER website says of the report.

"We examine a previously unstudied distortion in the natural gas distribution sector that allows firms to pass the cost of lost gas on to their customers. We show that firms abate leaks below what is theoretically optimal for a private firm - expenditure on abatement is well below the cost of lost gas. Additionally, natural gas, primarily composed of methane, is both explosive and a potent greenhouse gas. Thus the climate impacts of leaked methane greatly exacerbate the inefficiencies created by imperfect price regulation."

Judy Palnau, a spokeswoman for the Michigan Public Service Commission, couldn't immediately be reached for comment on Wednesday.

Ryan Stanton covers the city beat for The Ann Arbor News. Reach him at ryanstanton@mlive.com.