Another painful winter?
Thursday, October 9, 2008—Natural gas prices have plunged for northern
Illinois consumers but still remain at record highs in the central and southern
parts of the state.
Average natural gas prices for
Illinois utilities, 2007 vs. 2008
Rates for Nicor Gas, North Shore Gas, and Peoples Gas have finally dipped below
$1 a therm, but customers of the Ameren utilities in central and southern
Illinois continue to pay rates at record levels.
(See the latest prices.) Still, even for northern
Illinois consumers, this year's natural gas prices are well above last year's
levels, so no matter where consumers live they will pay more for natural gas
compared with last winter.
Illinois utilities, 2007 vs. 2008
Company
Jan-Sept 2008
Full Year 2007
Increase
per
therm prices
The Energy Information Administration (EIA) predicted in October that homes in the Midwest will pay about 17 percent more to heat their homes with natural gas. Consumers
who use heating oil could pay about 12 percent more. The EIA predicted
that homes using propane and electricity will pay about 10 percent and
5 percent more, respectively.
"Illinois consumers face another painful winter,” CUB Executive Director David Kolata said. "Until the federal government decides to better monitor the energy markets, Illinois consumers will be trapped on a natural gas roller coaster, with wide swings in the market.”
Even before the winter heating season, which began in October, natural gas prices were at record levels, ranging from $1.20 per therm to $1.50 per therm. As the chart above shows, over the first nine months of the year, average natural gas prices for most Illinois consumers have risen by about 16 percent to 39 percent.
Half-year profits, major gas produces, 2007 vs. 2008
CUB often gets asked, “Who’s making money off the high natural gas prices?”
(See
The Facts about Natural Gas Prices.) By law, Illinois utilities
aren’t supposed to profit off the high prices. They’re supposed to simply pass
those costs onto consumers, with no markup. However, natural gas producers and
marketers, the companies that sell gas to the utilities, are making big
profits. The chart above shows how three top natural gas producers have
performed over the first half of the year.
Company
Jan.-June 2008 Profits
Jan.-June 2007 Profits
Increase
Exxon Mobil
$22.6
$19.5
16%
BP Amoco
$13.4
$10.9
23%
Chevron
$11.1
$10.1
10%
in
billions of dollars
CUB has long called for better monitoring of the natural gas industry. In 2006, Illinois Attorney General Lisa Madigan and her Midwest counterparts said the same in a report they released. “The sad irony is that the markets for natural gas (a commodity which is a vital necessity for many Americans) are subject to far less regulation than most other commodities, most of which are far less crucial to consumers’ everyday lives. Most people can live without pork bellies, soybeans or orange juice; but they cannot live without natural gas for heating,” the report said.
Recently, Congress passed legislation that closed the infamous Enron Loophole, which exempted key energy markets from regulation. But more work needs to be done. Consumers can take these key steps to protect their bottom lines against high heating costs:
Petition the federal government.
Pass this petition calling for greater oversight of the natural
gas industry. Send it back to:
Buy a programmable thermostat. It automatically adjusts your home’s temperature at certain times of day. In most homes, you can save about 2 percent of your heating bill for each degree that you lower the thermostat. Never turn your heat off completely, or so low that it’s a health hazard.
Turn off the computer. Computers are "vampire electronics" that needlessly suck energy. In fact, up to 10 percent of your home's energy usage may be attributed to the appliances and other items that use energy even when they're not in use. It's a myth that computers will wear out if turned on and off.
Use Compact Flourescent Light bulbs (CFLs). CFLs use 75 percent less energy. Each can save $40 to $50 on your energy bills over the life of the bulb. Take CUB’s Get Green pledge and you could win free CFLs or a month of free electricity.
Beware of rip-offs. In northern Illinois, unregulated gas suppliers may try to sell you gas plans that won’t save you money over what you currently pay with your regulated utility. See our Gas Market Monitor.
Find other ways to save. Depressed about your gas bill? Cut that phone bill. CUB has been helping consumers to cut their phone bills by hundreds of dollars a year. Visit our Phone-savings Center.
The Citizens Utility Board
309 W. Washington St., Suite 800
Chicago, IL 60606
309 W. Washington St., Suite 800
Chicago, IL 60606
Buy a programmable thermostat. It automatically adjusts your home’s temperature at certain times of day. In most homes, you can save about 2 percent of your heating bill for each degree that you lower the thermostat. Never turn your heat off completely, or so low that it’s a health hazard.
Turn off the computer. Computers are "vampire electronics" that needlessly suck energy. In fact, up to 10 percent of your home's energy usage may be attributed to the appliances and other items that use energy even when they're not in use. It's a myth that computers will wear out if turned on and off.
Use Compact Flourescent Light bulbs (CFLs). CFLs use 75 percent less energy. Each can save $40 to $50 on your energy bills over the life of the bulb. Take CUB’s Get Green pledge and you could win free CFLs or a month of free electricity.
Beware of rip-offs. In northern Illinois, unregulated gas suppliers may try to sell you gas plans that won’t save you money over what you currently pay with your regulated utility. See our Gas Market Monitor.
Find other ways to save. Depressed about your gas bill? Cut that phone bill. CUB has been helping consumers to cut their phone bills by hundreds of dollars a year. Visit our Phone-savings Center.
For more helpful information, please visit CUB’s Home Heating Survival Guide and our Get Green page.