the current edition - Citizens Utility Board
the current edition - Citizens Utility Board
the current edition - Citizens Utility Board
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Historically bad—again<br />
Natural gas industry in 2005 broke<br />
price records for third straight year<br />
Steady rise<br />
The natural gas industry likes to<br />
blame <strong>the</strong> high prices on Hurricanes<br />
Katrina and Rita, but <strong>the</strong><br />
average monthly per-<strong>the</strong>rm price<br />
offered by five major Illinois utilities<br />
was at record levels long before<br />
those twin tragedies in 2005.<br />
32¢<br />
47¢<br />
Tips on avoiding a few natural gas nightmares<br />
Malinowski<br />
Record!<br />
Record!<br />
52¢<br />
43¢<br />
Record!<br />
62¢<br />
68¢<br />
84¢<br />
1999<br />
’00 ‘01 ‘02 ‘03 ‘04 2005<br />
Source: This decade’s average monthly prices<br />
for AmerenCILCO, AmerenCIPS, AmerenIP,<br />
Nicor Gas, and Peoples Gas.<br />
The Nightmare:<br />
Colleen and Steven<br />
Malinowski’s gas<br />
company doesn’t read<br />
<strong>the</strong> meter for months<br />
at a time. The utility<br />
once sent <strong>the</strong> Elmwood<br />
Park family a<br />
$1,500 make-up bill after underestimating<br />
gas usage for months. Ano<strong>the</strong>r<br />
time it sent a $1,600 make-up<br />
bill. “How many times do you have<br />
to call and wait for <strong>the</strong>m to come before<br />
you just give up,” said Colleen,<br />
a mo<strong>the</strong>r of three. The utility had<br />
failed to make about 15 meter-reading<br />
appointments, she said.<br />
Tip:<br />
Read each bill to see if it is based<br />
on an “actual” or “estimated” meter<br />
reading. If a bill hasn’t been read for<br />
two straight months, call <strong>the</strong> company<br />
to find out why. Be persistent.<br />
Call your utility and ask if it allows<br />
customers to do <strong>the</strong>ir own readings.<br />
4<br />
For <strong>the</strong> third consecutive year, Illinois<br />
consumers endured <strong>the</strong> worst<br />
natural gas rates in state history,<br />
and <strong>the</strong>y are bracing for punishing<br />
prices <strong>the</strong> rest of <strong>the</strong> winter.<br />
Five major utilities—AmerenCIL-<br />
CO, AmerenCIPS, AmerenIP, Nicor<br />
Gas, and Peoples Gas—beat price records<br />
in at least eight months in 2005.<br />
The average monthly price for<br />
those utilities was <strong>the</strong> highest in Illinois<br />
history. Meanwhile, gas producers<br />
and marketers made huge profits.<br />
(See CUB Executive Director David<br />
Kolata’s column on p. 2.)<br />
At press time, <strong>the</strong> prices were still<br />
at record levels, with an average January<br />
price of $1.10 per <strong>the</strong>rm.<br />
CUB has asked state regulators<br />
to consider several actions, including<br />
allowing low-income customers<br />
to pay a certain percentage of <strong>the</strong>ir<br />
bills, according to <strong>the</strong>ir income, to<br />
survive <strong>the</strong> record prices without<br />
getting <strong>the</strong>ir heat turned off.<br />
CUB also asked regulators to probe<br />
why <strong>the</strong>re are sometimes wide price<br />
differences between <strong>the</strong> utilities.<br />
The Nightmare:<br />
Russell Ponder, of<br />
Homewood, thought<br />
he could save money<br />
on Nicor’s “Fixed Bill”<br />
program. But CUB has<br />
found that <strong>the</strong> fixed<br />
Ponder<br />
monthly bill offered to<br />
customers contains such a large markup<br />
that <strong>the</strong>y’re likely to pay much<br />
more than on standard rates. Ponder<br />
overpaid by hundreds of dollars, CUB<br />
found. “There’s no free lunch,” he said.<br />
Tip:<br />
Beware of any plan that seems to<br />
promise savings. Join your utility’s<br />
“budget plan,” which is different from<br />
<strong>the</strong> “Fixed Bill” plan. A budget plan estimates<br />
your usage for <strong>the</strong> next year<br />
and evens out monthly bills. At <strong>the</strong><br />
end of <strong>the</strong> year, <strong>the</strong> utility credits your<br />
account for overestimating your usage,<br />
or charges you for underestimating it.<br />
With <strong>the</strong> “Fixed Bill” plan, you’re simply<br />
out <strong>the</strong> money you overpaid.<br />
Just how bad is bad?<br />
The average monthly prices charged by major Illinois gas utilities were<br />
at all-time highs in 2005, marking <strong>the</strong> third straight year <strong>the</strong> companies<br />
smashed records.<br />
Nicor Gas<br />
2005—85.4 cents/<strong>the</strong>rm<br />
2004—64.6 cents/<strong>the</strong>rm<br />
Peoples Gas<br />
2005—86.8 cents/<strong>the</strong>rm<br />
2004—67.6 cents/<strong>the</strong>rm<br />
AmerenCILCO<br />
2005—79.9 cents/<strong>the</strong>rm<br />
2004—63.8 cents/<strong>the</strong>rm<br />
AmerenCIPS<br />
2005—87.6 cents/<strong>the</strong>rm<br />
2004—73.6 cents/<strong>the</strong>rm<br />
AmerenIP<br />
2005—79.6 cents/<strong>the</strong>rm<br />
2004—69.5 cents/<strong>the</strong>rm<br />
Ariel<br />
The Nightmare:<br />
Glen Ariel said he<br />
didn’t realize he was<br />
paying for something<br />
he didn’t need. Nicor’s<br />
$4 per month “Comfort<br />
Guard” plan covers repairs<br />
to exposed gas<br />
pipes, including <strong>the</strong> connector that<br />
links appliances to <strong>the</strong> main gas line.<br />
But it doesn’t cover many o<strong>the</strong>r repairs,<br />
and renters probably don’t need<br />
it, since landlords should handle such<br />
problems. Ariel was refunded <strong>the</strong> $94<br />
he had spent on <strong>the</strong> program, after<br />
CUB helped him argue that he didn’t<br />
need it since his gas stove had a new<br />
connector. “I’m not a senile old goof,”<br />
<strong>the</strong> 74-year-old Ariel said. “I couldn’t<br />
even begin to guess how many seniors<br />
are being scammed by this thing.”<br />
Tip:<br />
Read your bills carefully. Beware of<br />
strange charges, and call CUB for an<br />
explanation of <strong>the</strong> different fees.<br />
% increase<br />
32%<br />
28%<br />
25%<br />
19%<br />
15%<br />
The Nightmare:<br />
John Zager, of Chicago<br />
Heights, said <strong>the</strong><br />
man at <strong>the</strong> door gave<br />
<strong>the</strong> impression that<br />
he was from Nicor<br />
Gas. The man asked<br />
Zager<br />
for his bill to see if <strong>the</strong><br />
68-year-old retiree was eligible for any<br />
savings. Then he asked Zager to sign a<br />
form. “Wait a minute. I’m not signing<br />
anything,” Zager said. The man wasn’t<br />
from Nicor. O<strong>the</strong>r companies are allowed<br />
to compete with Nicor through<br />
<strong>the</strong> “Customer Select” program, which<br />
allows customers to choose a gas supplier<br />
o<strong>the</strong>r than <strong>the</strong>ir utility. Call CUB<br />
if you have complaints about <strong>the</strong> sales<br />
tactics of <strong>the</strong>se suppliers.<br />
Tip:<br />
Never give personal information to<br />
anyone who claims to be from <strong>the</strong><br />
“gas company.” Don’t sign anything<br />
until you identify <strong>the</strong> company and<br />
carefully read its “deal” in writing.<br />
The CUB Voice