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Energy report: What’s your gas utility charging?

As we approach the heart of the winter heating season, here’s a summary of what Illinois’ major utilities are charging for natural gas right now, compared with last November:

Ameren Zone 1 (Formerly AmerenCIPS): 53.482 cents per therm (November 2012: 64.76 cents per therm)

Ameren Zone 2 (Formerly AmerenCILCO): 53.673 cents per therm (November 2012: 61.36 cents per therm)

Ameren Zone 3 (Formerly AmerenIP): 53.779 cents per therm (November 2012: 64.23 cents per therm)

MidAmerican Energy: 58.67 cents per therm (November 2012: 56.28 cents per therm)

Nicor: 41 cents per therm (November 2012: 41 cents per therm)

North Shore Gas: 49.01 cents per therm (November 2012: 47.77 cents per therm)

Peoples Gas: 44.99 cents per therm (November 2012: 41.21 cents per therm)

Remember, the prices above reflect supply costs, which utilities are supposed to pass on to you, with no markup. (The companies profit off of separate “delivery charges,” what you pay to have them pipe gas to your home.)

As you can see, Ameren’s prices are down compared with the year before, while MidAmerican, North Shore Gas and Peoples Gas customers are all paying more than they did last November. This is in line with recent utility statements.

Peoples and North Shore, which are both owned by Integrys, said customers could pay about 13 percent more to heat their homes this winter. Nicor predicted about a 2 percent increase. Ameren predicted its prices would be down about 5 percent, but it was careful to warn that a colder winter could jack up overall bills (not to mention a $48 million “delivery” rate hike that could hit another part of your gas bill this winter). 

Notice how different this month’s gas prices are? CUB often gets consumer questions about this. Although the Illinois Commerce Commission (ICC) reviews the utilities’ gas-buying strategies for each previous year, there is a lot of room for variability from company to company. The explanations of why prices can be so different have not been crystal-clear, but here are a few factors put forward by the utilities:

-The gas-buying strategies of each utility. For example, Ameren said it locked in lower rates ahead of time and then stored it for the winter, leading to this winter’s price decrease. Still, the company’s rates are often significantly higher than what northern Illinois utilities charge.

-The amount of gas-storage capacity a company owns. Ameren has said in the past: “Ameren Illinois has less company-owned storage capacity than other utilities, meaning Ameren Illinois must lease more pipeline storage.”

-Access to different pipelines, storage fields and supply sources. If a utility has fewer options, that could mean higher costs. 

Ameren also has said that the cost of gas customers pay will be adjusted for “under and over collections,” to balance what customers and the utility paid for gas. If market changes lead to an underestimation of costs, that will increase the cost of gas at a future date to recover the difference.

Of course, northern Illinois consumers can take their chances with alternative gas suppliers, but CUB’s ongoing analysis of the market has found that most of the plans have not been money-savers, to date. Read CUB’s fact sheets on gas competition for Nicor customers and Peoples/North Shore Gas customers.

For more information about the charges on your gas bill, read CUB’s fact sheet “Making Sense of Your Gas Bill.”