Image courtesy of Michael Osmenda/Wikimedia Commons
Just when we thought spring was upon us, news of March natural gas rates hit—and it’s a doozy.
Peoples Gas and North Shore Gas, which serve the Chicago area, announced yesterday that March supply rates will soar to about 93 cents per therm and 88 cents per therm respectively. That’s up a staggering 79 percent for Peoples and 55 percent for North Shore customers! (Nicor Gas consumers aren’t faring much better–preliminary estimates show a 17 cent per therm increase from February, to 68 cents per therm.
As if that weren’t bad enough, Peoples/North Shore revealed the same day that they are asking the Illinois Commerce Commission (ICC) for a combined delivery rate hike of $136 million per year ($128.9 million for Peoples and $7.1 million for North Shore). Peoples Gas said the increase would average about $5 per month for “typical residential heating customers.” North Shore estimated the impact at about $2.50 per month for its customers.
The ICC will rule on the request after an 11-month case, meaning the rate hike would go into effect in the winter of 2015.
Keep in mind, delivery rates—which take up about a third to a half of a gas bill– are the charges companies issue to deliver gas to homes. Utilities are allowed to make a profit off the “delivery” charges on bills, but not the cost of the actual gas. Under the law, utilities are supposed to pass the cost of gas onto customers, with no markup. That means Peoples Gas won’t be profiting off its 93 cents per therm rate in March.
Still, CUB told Crain’s Chicago Business these astronomical jumps raise questions that warrant further investigation.
