Many natural gas customers in Illinois are paying the highest prices in more than a decade, with most utilities charging nearly $1 a therm or more in May, according to gas price data filed with the Illinois Commerce Commission (ICC).
This latest development shows that even though winter is over, a gas price spike–now in its 13th consecutive month–is not. And it increases the urgency for those in need to apply for energy assistance by a May 31 deadline. If you are struggling, please visit the Help Illinois Families website or call 1-833-711-0374 to learn more.
For more than a year, Illinois and the rest of the country have wrestled with elevated prices. Price spikes are a recurring theme in the fossil fuel industry, and this one was first sparked by extreme weather in 2021 and then propped up by other developments, including the Russian invasion of Ukraine, that have combined to cause ongoing pain for Illinois consumers.
About 80 percent of Illinois homes heat with natural gas, and the past winter was their most expensive winter since the cold season of 2008-09, with many customers paying hundreds of dollars more to heat their homes.
Utilities file new supply prices–called the Purchased Gas Adjustment (PGA)–each month. Below are prices for May.
May Heating Prices
|Ameren Illinois||70.844 cents per therm (up about 7.6 percent from May 2021)|
|Consumers Gas||97.484 cents per therm (up about 147.6 percent from last May)|
|Illinois Gas||98.49 cents per therm (up about 213.2 percent from last May)|
|Liberty Utilities||$1.4279 per therm (up about 97.8 percent from last May)|
|MidAmerican Energy||93.99 cents per therm (up about 39.9 percent from last May)|
|Mt. Carmel||50.16 cents per therm (up about 129.8 percent from last May)|
|Nicor Gas||$1.11 per therm (up about 109.4 percent from last May)|
|North Shore Gas||$1.0233 per therm (up about 132.2 percent from last May)|
|Peoples Gas||99.24 cents per therm (up about 86.4 percent from last May)|
Remember, you cannot switch to another utility. 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.
Gas price spikes happen periodically, with the last one hitting customers in 2014. The origins of the latest price spike can be traced to February 2021 when record cold across the southern United States caused disruptions in the gas distribution network (which wasn’t properly weatherized for extreme cold in the South). That limited supply just as demand went up.
Other factors have kept prices high: 1) we’re using more gas as economies worldwide recover from the pandemic; 2) we’ve increased Liquid Natural Gas (LNG) exports to other parts of the world, such as Europe, and that has kept supply lower here; 3) the Russian invasion of Ukraine has threatened supply constraints in Europe; 4) gas exploration and well construction has been down in recent years; 5) air conditioning demanded an increased use of gas to generate electricity in the summer of 2021; 6) colder-than-normal weather this past winter led to more gas use; and 7) another example of extreme weather: Hurricane Ida in August of 2021 for a time stopped more than 90 percent of gas production in the Gulf of Mexico, according to the Energy Information Administration.
Crain’s Chicago Business reported that prices charged by northern Illinois utilities are above even what has been seen in the futures markets. A Peoples Gas spokesman told the business paper that its supply price is higher than market because the utility is continuing to recover what it paid over the winter for gas purchases. That means the higher prices could persist for several more months.
But the gas utilities hide behind these supply and demand excuses. There’s more to this 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. 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 last November—the largest gas hike in Illinois history.
The breakneck pace of spending is taking its toll. Crain’s also reported some grim statistics that indicate just how much people are struggling. According to state regulators, in March 256,566 Chicago households (more than 31 percent of Peoples’ 809,252 residential customers) were charged late-payment fees. To compare, in the same month, ComEd hit 21 percent of its Chicago residential customers with late-payment fees.
Also, 150,705 households, or 19 percent of Peoples’ total residential customers, were at least 30 days behind on their gas bills, by an average of $744. The Climate & Equitable Jobs Act, or CEJA, is set to end late-payment fees for lower income customers next year.