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Heating prices still painfully high, as January opens with a cold blast

As frigid weather descended upon Illinois in the new year, CUB staffers were busy answering calls from consumers wondering why their heating bills were so high.

In January, the price per therm many consumers are paying for natural gas, also known as the Purchased Gas Adjustment, or PGA, is 41 percent to 206 percent higher than last winter. The prices for major natural gas utilities in Illinois are as follows, along with the percentage increase from January of 2021:

Ameren Illinois – 70.539¢ per therm (up 88 percent from last January)
Consumers Gas – 46.989¢ per therm (up 52 percent from last January)
Illinois Gas – 44.66¢ per therm (up 46 percent from last January)
Liberty Utilities – 59.34¢ per therm (up 157 percent from last January)
MidAmerican Energy – 97.88¢ per therm (up 206 percent from last January)
Mt. Carmel – 61.61¢ per therm (up 62 percent from last January)
Nicor Gas – 61.00¢ per therm (up 110 percent from last January)
North Shore Gas – 55.82¢ per therm (up 41 percent from last January)
Peoples Gas – 55.46¢ per therm (up 92 percent from last January)

For seven of the utilities–all but Ameren Illinois and MidAmerican–supply prices are down from December, hopefully signaling that market prices are beginning to ease. But across the board, winter prices are still much higher than they have been in more than a decade.

For about 10 months, natural gas prices have been elevated, sparked at first by record-low temperatures that hit the nation last February. In the South, the extreme cold, connected to climate change, disabled wellheads and other parts of the nation’s natural gas delivery network just as demand went up.

A number of other factors have contributed to the spike, including increased Liquid Natural Gas (LNG) exports to other parts of the world, such as Europe, keeping supply lower here;  less gas exploration and well construction; increased use of gas for electricity generation during the hot summer; and Hurricane Ida, which knocked more than 90 percent of gas production in the Gulf of Mexico offline in late August.

While gas utilities simply pass the high prices onto customers, with no markup–it’s illegal for them to profit off of gas supply–they have increased and profited off bills in other ways.

CUB has been on a years-long campaign to rid Ameren Illinois, Nicor Gas and Peoples Gas bills of the “Qualified Infrastructure Plant” surcharge. The charge, which went into effect thanks to a law the General Assembly passed in 2013, allows the companies to sidestep the traditional regulatory process and rake in revenue more quickly, leading to rapidly rising heating bills. When the utilities first got legislative approval for this surcharge, we were told it would only cost about $13 a year on average for Peoples Gas customers. In the fall, those customers were paying about $13 a month—on track for $150 a year.

It is expected that gas companies maintain their pipelines and other infrastructure, but they can do this without bankrupting their customers. In 2021, Ameren received a $76 million increase and Nicor a record $240 million increase, and we’re concerned Peoples Gas will come in for an increase in 2022.

While we experienced relatively mild weather October through December, early January has been marked by frigid temperatures with wind chills well below zero–the kind of weather that leads to even higher bills. CUB urged consumers to visit CUBHelpCenter.com. The free online resource  explains why gas prices are high, offers safety and efficiency tips, outlines a customer’s rights against disconnection and arms customers with information about energy assistance. Also, check out these efficiency and hazardous weather tips.

If you are struggling to afford your bills, please contact your utility to see about energy assistance available and to work out a consumer-friendly plan to pay your bills and stay connected.

Reminder: You cannot switch to another utility. Utility service territories are geographic: Your utility is determined by where you live. Nicor, Peoples Gas and North Shore Gas can switch to alternative suppliers, but be careful: That market has been plagued by bad deals and rip-offs.

Suppliers may try to use the headlines about high prices to lure you into a bad deal. Remember, suppliers are impacted by the same market conditions that are causing utility supply rates to go up. If an offer from a supplier seems too good to be true, there’s a good chance it is.