Gas Market Monitor
Will I save money by switching to an alternative gas supplier?
It's likely that you will NOT save, as the statistics from CUB's Gas Market Monitor show here.
For years, Northern Illinois consumers have been able to switch from their utility to an unregulated gas supplier. Even those who switch may have trouble determining whether they've saved money.
It all depends on which company you choose and when you sign up. A fixed rate is basically an insurance plan against soaring natural gas prices. You're likely to pay a premium for that insurance. If you happen to lock in a fixed rate just before prices skyrocket, you might save money.
|Summary of plans|
|Average $1375.40 Loss|
Read below for more detailed information.
However, you may not be so lucky if prices plummet. You might do better with a variable rate, which changes on a monthly basis, according to the cost of gas or some market indicator of gas (plus a markup). However, there's no guarantee. You're simply gambling that the unregulated supplier will do a better job buying gas than the utility. Sadly, you would need a crystal ball to determine whether any of these plans are big winners.
CUB's Gas Market Monitor—the only study of its kind in Illinois—gives a "Monday morning quarterback" look at whether plans offered by unregulated gas companies have saved or are saving money. It provides a monthly snapshot of how hundreds of plans have fared since 2003.
This is no crystal ball, but it is the most comprehensive gas-price analysis available and we hope it will help you make an informed choice. The charts below show how plans offered by various companies over the years have fared. After exploring the Gas Market Monitor, get more information on our Natural Gas page
, in the section called "Has The 'Gas Company' Tried to Sell You A New 'Deal?'" It includes fact sheets, updated weekly, on the offers being marketed by unregulated gas companies.
Past savings are no guarantee
Past savings obtained by these plans are no guarantee of future savings. It's a roll of the dice, much like the stock market, except you are betting on the movement of natural gas prices. Industry and consumer experts can analyze past trends, but no one knows what the price of gas will be next week, let alone next year or five years from now.
Beware of misleading marketing
Don't trust anyone who promises savings on your gas bill because they would need a crystal ball to do it. Remember, if it sounds too good to be true, it probably is.
Also, beware of salespeople claiming to be from the gas company and never give out your account number to them. Always ask to see any offer in writing and take at least 48 hours to review and research it.
Read the fine print
Watch for hidden fees that boost the advertised per-therm rate, and early-termination charges that could penalize you by hundreds of dollars if you drop out of the offer before the contract is up.
Remember, a fixed rate is not always fixed. Some contract loopholes allow companies to cancel the agreement if prices rise and the terms no longer benefit them. You are signing a legal contract, so read it carefully.
You don't have to switch
If you're concerned about rising natural gas prices, your regulated utility's "budget-billing plan" may be your best bet. Only switch gas suppliers if you fully understand all the terms and potential risks.
Many people switch suppliers thinking it's a way to save money and that's not always the case.
If it sounds too good to be true…
…it probably is!
At least one alternative supplier has defaulted on its contracts in the past. The company ended the contracts and put consumers on a higher market rate, which sparked a class action lawsuit.
CUB endorses no company
The Gas Market Monitor is for informational purposes only.
CUB does not endorse any particular plan or provider.
Confused? Call CUB
CUB can help you weigh all the pros and cons of switching to a new supplier. First check out our publications
on the two gas choice programs: Customer Select (for Nicor customers) and Choices for You (for Peoples customers). If you still have questions, please call CUB's Consumer Hotline,
How to Read This Chart
The chart below shows the performance of plans offered by unregulated gas suppliers, to date. The "Summary" shows the total number of plans analyzed. This includes plans that have ended as well
Fixed plans have one rate over the term of the plan.
Variable plans have rates that change every month.
as active plans. The chart displays the percentage of plans that have lost or are losing customers money and the percentage that have saved or are saving money. The average result per plan (a savings or a loss) is included, too. The chart then breaks down that information by supplier. It tells you the number of plans that are fixed versus variable for each supplier. For more detailed information on how CUB estimated savings and losses, read the methodology below.
This analysis is based on data obtained from suppliers each week. It includes hundreds of active plans as well as expired ones (the plan's term has ended and customers are no longer on it).
For example, if you signed up in December 2005 for a one-year plan, the analysis of that plan's results would be in the "expired" category, because the term would have ended in
December 2006. If, in December 2005, you had signed up for a five-year plan, the analysis would be included in the active section and would reflect savings and losses to date.
Four types of plans have been offered. With a fixed rate, customers pay a set per-therm price for a term of one to five years. A variable plan, which is tied to some type of formula that tracks the natural gas market, has per-therm prices that vary from month to month, just like the rates offered by the regulated utilities, Nicor Gas and Peoples/North Shore Gas. Over the course of the year, the Gas Market Monitor counts variable plans as 12 distinct offers, each with a one-year term. While unregulated gas suppliers introduce variable plans at the beginning of a month, they might offer a new fixed-rate plan in the middle or near the end of a month. Regardless of when a fixed-rate plan is first offered, CUB doesn't begin tracking it until the first day of the next month. CUB will continue to track that plan until its term ends.
Two other types of plans are not included in the Gas Market Monitor because they are rare and because they are difficult to track. Mixed plans offer a combination of fixed and variable rates at different times of the year. Also not included are some offers by an unregulated sister company to Nicor Gas, called Nicor Advanced Energy. For some plans, that company charges prices that differ by individual customer. One example is "Lock 12," which charges you a set monthly bill for a year, depending on your own past usage and other factors—plus a hefty markup. With such atypical plans, it's impossible to make the apples-to-apples comparisons featured in the Gas Market Monitor.
In addition to the per-therm rate, many plans include additional fees, such as a "balancing charge" and a monthly service fee. The "Transportation Service Credit" (for customers of unregulated suppliers in Nicor Gas territory) and the "Hub Credit Gas Charge" (for customers of unregulated suppliers in Peoples Gas territory) also will affect the advertised price. Wherever applicable, the analysis includes those fees and credits. Taxes and other government-mandated surcharges are not included.
CUB estimates a typical yearly usage of 1,325 therms and allocates those therms for each month based on gas-usage data from the Illinois Commerce Commission (ICC). Actual results will vary based on individual usage. The analysis is based on data obtained from suppliers each week.
The plans you see here were offered at least through the end of the previous month, but may have changed or been discontinued by the time you read this. CUB's Gas Market Monitor is the most comprehensive analysis of Illinois' natural gas market available, covering more than 3,000 plans that are or have been offered since 2003. Every attempt has been made to verify all the information gathered with the companies listed, and CUB has strived to be conservative and prudent in its methodology.
If there is a gap in information, CUB has made every attempt to point that out and compensate for it in its methodology. If you have any questions, please contact CUB, at 1-800-669-5556