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Gas prices still skyrocketing–thank goodness winter is ending

Winter is ending, and hopefully warm weather is on the way, because natural gas prices continue to be through the roof. 

About 80 percent of Illinois homes heat with natural gas, and this has been their most expensive winter since the cold season of 2008-09. 

Illinois’ natural gas utilities file new supply prices–called the Purchased Gas Adjustment (PGA)–each month. Below are the prices for April. Compared to soaring gasoline prices, these numbers may not seem high, but many customers have paid hundreds of dollars more to heat their homes this past winter season, October through March. An analysis by CUB found that gas utilities in Illinois have been charging prices that were 60 percent to 159 percent higher than the previous year. 

April Heating Prices

Ameren Illinois – 68.619¢ per therm
Consumers Gas – 80.724¢ per therm
Illinois Gas –  65.92¢ per therm
Liberty Utilities – 92.1¢ per therm
MidAmerican Energy – $63.34 per therm
Mt. Carmel – 59.93¢ per therm
Nicor Gas – 68.00¢ per therm
North Shore Gas – 65.54¢ per therm
Peoples Gas – 61.25¢ per therm 

Note: You cannot switch to another utility. Utility service territories are geographic: Your utility is determined by where you live. Gas utilities are not allowed to profit off supply prices—they pass those costs from gas producers and marketers onto customers with no markup. State regulators annually review the utilities’ gas-management procedures to ensure the companies did a reasonable job with their gas purchases, given market conditions, to hold down costs for consumers as much as possible.

For more than a year now, natural gas supply prices have been elevated. The problem was first sparked by record-low temperatures that hit the nation last February, causing disruptions in the gas distribution network that was not properly weatherized in the Southern United States, just as demand went up.

Other factors have helped keep prices elevated, including: 1) increased demand as economies worldwide begin to recover from the pandemic; 2) increased Liquid Natural Gas (LNG) exports to other parts of the world, such as Europe, keeping supply lower here; 3) possible supply constraints in Europe caused by the Russian invasion of Ukraine);  4) less gas exploration and well construction in recent years; 5) increased use of gas for electricity generation to run air-conditioners during hot weather last summer; and 6) Hurricane Ida knocked more than 90 percent of gas production in the Gulf of Mexico offline in August 2021, according to the Energy Information Administration.

But the high supply prices are only part of the story. In Illinois, overly aggressive spending and rampant rate hikes by Peoples Gas, Nicor Gas and Ameren Illinois also have contributed to skyrocketing gas bills.

While utilities cannot profit off gas supply, they have increased and profited off another part of the bill: Delivery, what they charge to deliver gas to homes. CUB is working to eliminate the “Qualified Infrastructure Plant” surcharge from Ameren, Nicor and Peoples Gas bills. (Take Action!) The charge, which went into effect thanks to a law the General Assembly passed in 2013, allows gas utilities to sidestep the traditional regulatory process and rake in revenue more quickly, leading to rapidly rising heating bills. 

The charge for Peoples Gas, which just recorded record profits, is now more than $13 a month, on average—on track for more than $150 a year. Also, Ameren Illinois received a $76 million gas rate hike in 2021, and Nicor has increased delivery rates by 77 percent, or $500 million, since 2018. That includes its $240 million increase in November—the largest gas hike in Illinois history.

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 winter weather tips.
If you are having difficulty affording your gas bills, watch CUB’s video on three actions you can take. The state of Illinois is encouraging those in need to apply for $150 million in energy assistance by May 31. Visit the Help Illinois Families website or call 1-833-711-0374 to learn more.