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CUBFacts
Natural gas usage is billed by the therm. One therm equals the amount of
natural gas needed to run a typical residential furnace for one hour. Your gas
meter measures the volume of gas in cubic feet, which is converted to therms on
your bill.
Making Sense of Your Gas Bill
There are three types of charges on gas bills: fixed monthly fees, gas costs and taxes and surcharges. Fixed monthly fees are set by the Illinois Commerce Commission (ICC) and stay the same no matter how much natural gas you use. Gas costs vary monthly based on your usage and the changing price of gas bought by the utility. Utilities should go to a customer’s home and read the gas meter at least once every other month. Check your bill to make sure that it is not being estimated more than two months in a row. If it is, call the utility, ask why it’s not reading the meter, and request an actual reading. If a utility does estimate usage, the amount will be based on last year’s usage for the same month, adjusted for weather. Consumers with questions about their gas bills can call CUB’s Consumer Hotline, 1-800-669-5556. Common Charges on Gas Bills
Distribution chargeThe ICC sets the rate your utility can charge you for delivering natural gas through its pipes. Gas usage is converted to therms and multiplied by the rate to come up with the charge. It’s also sometimes called the energy charge or the delivery charge. Customer charge This fee is supposed to cover all the company’s fixed service costs, such as billing and meter readings, that don’t vary with usage. It’s also called the basic service charge or the account charge. Purchased gas adjustment charge Under the law, gas utilities don’t make a profit off this pertherm charge, which is used to pass along the price of natural gas that utilities pay to suppliers. The ICC doesn’t approve the charge in advance. However, the commission reviews the charge annually and can order a refund for customers if it finds the utilities weren’t using sound business practices to buy gas at a reasonable cost. It’s also called the cost of gas charge, the natural gas cost, the gas charge adjustment or the gas supply charge. State utility tax This charge is 5 percent of current charges before taxes or 2.4 cents per therm, whatever is lower. At current gas rates, customers are paying the per-therm rate. The tax also is called the public utility tax or the Illinois gas revenue tax. Municipal tax Municipalities can impose their own utility taxes, but state law caps the amount they can collect. It’s also called a franchise tax. Regulatory tax This tenth-of-a-cent tax helps fund the ICC, which regulates Illinois utilities. It’s also called the Illinois CC assessment, the Illinois gross revenue tax or the utility fund tax. Environmental adjustment charge The ICC allows companies to charge customers for the cost of cleaning up toxic waste at old gas manufacturing sites. This per-therm charge also is called the environmental charge, the environmental activities adjustment, the environmental activities charge and the environmental recovery charge. Pipeline transition surcharge Illinois Power is phasing out this charge, which allowed it to cover costs incurred by pipeline companies that supply the company with natural gas. The Customer Charge and Distribution Charge
The chart below summarizes two major charges on your bill that are set by the
Illinois Commerce Commission (ICC). Keep in mind that these two charges don’t
include the Purchased Gas Adjustment (PGA), which fluctuates based on the
market price of gas and makes up a large chunk of your bill.
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