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December natural gas prices fall for many utilities–although they’re still painfully high

For the second straight month, natural gas prices have dropped for all or most of Illinois’ utilities. But most gas customers are still paying about double or worse than they did just two years ago for the volatile fossil fuel.

“Nobody has a crystal ball, but we’re thankful for this small drop in prices,” CUB Communications Director Jim Chilsen said. “Still, despite these recent declines, the natural gas market is volatile, and it’s likely to be an expensive winter. Consumers should concentrate on making their homes as energy efficient as possible.”

“And as consumer advocates, we need to keep working for reforms, including beginning the process to move away from an expensive fuel like natural gas.” 

About 80 percent of Illinois homes heat with natural gas, and last winter was their most expensive since the cold season of 2008-09, with many customers paying hundreds of dollars more to heat their homes. This winter could be worse. The Energy Information Administration, the statistical arm of the U.S. Energy Department, predicts Midwest consumers who heat their homes with natural gas will pay on average about 30 percent more this winter. 

Gas utilities file new supply prices– called the Purchased Gas Adjustment (PGA)– each month with the Illinois Commerce Commission (ICC). Below are the supply prices for December, and how they compare with the prices from last year.

December Gas Prices 

Ameren Illinois 73.14 cents per therm (up about 5 percent from December 2021)
Consumers Gas 67.81 cents per therm (down about 0.5 percent from last December)
Illinois Gas 70.14 cents per therm (up about 43 percent from last December)
Liberty Utilities 76.57 cents per therm (up about 27 percent from last December)
MidAmerican Energy 61.77 cents per therm (down about 26 percent from last December)
Mt. Carmel 89.94 cents per therm (up about 13 percent from last December)
Nicor Gas 85.00 cents per therm (up about 25 percent from last December)
North Shore Gas 45.80 cents per therm (down about 25 percent from last December)
Peoples Gas 55.27 cents per therm (down about 19 percent from last December)

Note: Your utility is determined by where you live, so you cannot switch from one utility to another. 

From October to November, all major utility customers saw a drop in the price they pay for natural gas. In December, seven out of the 9 major utilities saw decreases from the previous month. That included North Shore Gas (37 percent), Nicor (25 percent), Peoples Gas (22 percent) and Ameren (9 percent). Only Consumers Gas (8 percent) and Liberty (0.9 percent) saw increases in their prices from November. 

The average price charged by all 9 major Illinois utilities has gone from about $1 a therm in October to about 69.5 cents a therm this month–still more than double the average price from December 2020. 

But the natural gas market is a roller coaster ride. Peoples Gas said its 55.27 cents per therm supply rate isn’t likely to last. “Based on current information, we expect gas charges for January and February to be similar to what we saw in November, in the 70s in cents per therm,” a Peoples Gas spokesman told Crain’s Chicago Business.

Under Illinois law, 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 (and CUB) 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 supply price spikes are a recurring theme in the fossil fuel industry–there was a jump in prices in the winter of 2008-09, and for a period in 2014. The latest spike was first caused by extreme weather in February of 2021. Record cold in the southern United States for a time froze gas in wellheads and pipelines, limiting supply just as demand went up. Since then, the high prices have been propped up by other developments, including Hurricane Ida in the summer of 2021 and the Russian invasion of Ukraine this year, which have combined to cause ongoing pain for Illinois consumers. The elevated gas prices have also caused electricity prices to skyrocket–because gas is often used to generate electricity.

But the gas utilities hide behind supply and demand excuses. There’s more to this story in Illinois: Aggressive spending and/or rampant rate hikes by Peoples Gas, Nicor Gas and Ameren Illinois also have contributed to skyrocketing gas bills.

While utilities cannot profit from gas supply, they have increased and profited off another part of the bill: the Delivery section, 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 was created by a law the Illinois General Assembly passed in 2013, allows gas utilities to rake in revenue more quickly, leading to rapidly rising heating bills. Read our Q&A on high natural gas bills. 

The last two expensive winters have just reinforced the need to move away from expensive, dirty natural gas as a heating source. CUB Executive Director David Kolata has said the recent efforts by the City of Chicago to move to cheaper and cleaner forms of heating than natural gas are a big step in the right direction. “Natural gas is simply unsustainable from an environmental and affordability perspective,” he said.

While CUB works for long-term reform, here are some actions consumers can take to get through this difficult winter: 

  • See if you qualify for energy assistance. The application process for the Low Income Home Energy Assistance Program (LIHEAP) has reopened through May 31, 2023, or until funds are exhausted. Households at or below 200 percent of the federal poverty level are eligible for LIHEAP funding. To apply or learn more, visit www.helpillinoisfamilies.com or call the Help Illinois Families Assistance Line at 1-833-711-0374.
  • Contact your utility. If you are having trouble affording your gas bills, it is vital that you contact your utility. Ask if you qualify for any energy assistance programs; see if you can set up a payment plan to give you a longer time to pay off your bills; and inquire about no or low-cost energy efficiency programs the company offers.
  • Beware of alternative supplier rip-offs. Alternative gas suppliers are impacted by the same market conditions that are causing utility prices to increase, so be careful about getting lured into bad deals. Be wary of low introductory rates that will skyrocket after a short period, and read the fine print for add-on fees that can raise the cost of the plan. If a deal seems too good to be true, there’s a good chance it is. Even in this market, it’s likely the utility is your best bet. (Note: Only consumers in Northern Illinois have gas choice.)
  • Practice energy efficiency at home. For tips and information about helpful energy efficiency programs offered by your utility, visit CUB’s Clean Energy page. Also visit CUBHelpCenter.com for more information about energy assistance, tips on cutting your bills and your rights to avoid disconnection. Read our tips here and here. A summary:
    • Set your thermostat to 68 degrees when you are home and awake. When you’re asleep or away, you can turn it 7-10 degrees lower. NEVER go below 55 degrees, because you could freeze your pipes.
    • Reduce the drafts. Weatherize your windows and doors, and pinpoint other drafts in your home. Your hardware store has materials to seal those leaks.
    • Don’t overwork your heating system. Close blinds as an extra layer of protection against icy night winds. But let the sunlight through during the day to help heat your home. Clear radiators, registers, air returns and baseboards of obstructions. Dust, carpet and furniture can block the heat and leave a room chilly.
    • Clean or replace filters for a forced-air heating system. A dirty or non-functioning filter does nothing but drain money from your wallet. Check it every month—and clean or replace it if it’s dirty.