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Historically bad—again Natural gas industry in 2005 broke price records for third straight year Steady rise The natural gas industry likes to blame the high prices on Hurricanes Katrina and Rita, but the average monthly per-therm price offered by five major Illinois utilities was at record levels long before those twin tragedies in 2005. 32¢ 47¢ Tips on avoiding a few natural gas nightmares Malinowski Record! Record! 52¢ 43¢ Record! 62¢ 68¢ 84¢ 1999 ’00 ‘01 ‘02 ‘03 ‘04 2005 Source: This decade’s average monthly prices for AmerenCILCO, AmerenCIPS, AmerenIP, Nicor Gas, and Peoples Gas. The Nightmare: Colleen and Steven Malinowski’s gas company doesn’t read the meter for months at a time. The utility once sent the Elmwood Park family a $1,500 make-up bill after underestimating gas usage for months. Another time it sent a $1,600 make-up bill. “How many times do you have to call and wait for them to come before you just give up,” said Colleen, a mother of three. The utility had failed to make about 15 meter-reading appointments, she said. Tip: Read each bill to see if it is based on an “actual” or “estimated” meter reading. If a bill hasn’t been read for two straight months, call the company to find out why. Be persistent. Call your utility and ask if it allows customers to do their own readings. 4 For the third consecutive year, Illinois consumers endured the worst natural gas rates in state history, and they are bracing for punishing prices the rest of the winter. Five major utilities—AmerenCIL- CO, AmerenCIPS, AmerenIP, Nicor Gas, and Peoples Gas—beat price records in at least eight months in 2005. The average monthly price for those utilities was the highest in Illinois history. Meanwhile, gas producers and marketers made huge profits. (See CUB Executive Director David Kolata’s column on p. 2.) At press time, the prices were still at record levels, with an average January price of $1.10 per therm. CUB has asked state regulators to consider several actions, including allowing low-income customers to pay a certain percentage of their bills, according to their income, to survive the record prices without getting their heat turned off. CUB also asked regulators to probe why there are sometimes wide price differences between the utilities. The Nightmare: Russell Ponder, of Homewood, thought he could save money on Nicor’s “Fixed Bill” program. But CUB has found that the fixed Ponder monthly bill offered to customers contains such a large markup that they’re likely to pay much more than on standard rates. Ponder overpaid by hundreds of dollars, CUB found. “There’s no free lunch,” he said. Tip: Beware of any plan that seems to promise savings. Join your utility’s “budget plan,” which is different from the “Fixed Bill” plan. A budget plan estimates your usage for the next year and evens out monthly bills. At the end of the year, the utility credits your account for overestimating your usage, or charges you for underestimating it. With the “Fixed Bill” plan, you’re simply out the money you overpaid. Just how bad is bad? The average monthly prices charged by major Illinois gas utilities were at all-time highs in 2005, marking the third straight year the companies smashed records. Nicor Gas 2005—85.4 cents/therm 2004—64.6 cents/therm Peoples Gas 2005—86.8 cents/therm 2004—67.6 cents/therm AmerenCILCO 2005—79.9 cents/therm 2004—63.8 cents/therm AmerenCIPS 2005—87.6 cents/therm 2004—73.6 cents/therm AmerenIP 2005—79.6 cents/therm 2004—69.5 cents/therm Ariel The Nightmare: Glen Ariel said he didn’t realize he was paying for something he didn’t need. Nicor’s $4 per month “Comfort Guard” plan covers repairs to exposed gas pipes, including the connector that links appliances to the main gas line. But it doesn’t cover many other repairs, and renters probably don’t need it, since landlords should handle such problems. Ariel was refunded the $94 he had spent on the program, after CUB helped him argue that he didn’t need it since his gas stove had a new connector. “I’m not a senile old goof,” the 74-year-old Ariel said. “I couldn’t even begin to guess how many seniors are being scammed by this thing.” Tip: Read your bills carefully. Beware of strange charges, and call CUB for an explanation of the different fees. % increase 32% 28% 25% 19% 15% The Nightmare: John Zager, of Chicago Heights, said the man at the door gave the impression that he was from Nicor Gas. The man asked Zager for his bill to see if the 68-year-old retiree was eligible for any savings. Then he asked Zager to sign a form. “Wait a minute. I’m not signing anything,” Zager said. The man wasn’t from Nicor. Other companies are allowed to compete with Nicor through the “Customer Select” program, which allows customers to choose a gas supplier other than their utility. Call CUB if you have complaints about the sales tactics of these suppliers. Tip: Never give personal information to anyone who claims to be from the “gas company.” Don’t sign anything until you identify the company and carefully read its “deal” in writing. The CUB Voice
Pop Quiz! So how well do you know your gas bill? Quiz Class: Gas Bill 101 Teacher: Mr. Kolata Name: Homeroom: It’s not just for ‘tree-huggers’ Getting the natural gas bill Section I: Multiple Choice 2. Which charge makes up most of is kind of like getting slapped 1. What does “EST” mean on your your gas bill? Julia Ortiz, a 42-year-old factory with one of those pop quizzes we used to endure in high er of two, is always looking to save as bill? A. Purchased Gas Adjustment (PGA) worker from Cicero and single moth- A. Established Account B. Monthly customer charge B. Estimated Reading C. Distribution charge much money as possible. school: they’re filled with a lot C. Environmental Systems Therm Fee D. Environmental Recovery Cost D. Energy State Tax “My bills are too high,” said Julia. of confusing words and numbers—and they’re never wel- 3. Natural gas usage is billed by cleaning up pollution at old gas I’m scared of what is going to hap- 4. This charge covers the costs of “I’m afraid to open my mail because come. Well, here’s a relatively what unit of measurement? manufacturing sites. pen.” A. The kilowatt-hour A. Environmental Systems Therm Fee painless pop quiz to help you The average American household B. Cubic feet B. Environmental Recovery Cost spends $1,500 annually on energy better understand those bills. C. The therm C. Distribution Maintenance Charge D. The decatherm D. Monthly customer charge bills, a number that could increase by Don’t worry, we supply the answers on p. 7—and you won’t be Section II: True or False federal government. Because half of 50 percent this year, according to the sent to the principal’s office for 5. The customer charge (a.k.a. basic 6. The amount you pay for distribution costs changes from month to those costs go toward heating and cooling homes, basic home improvements service charge or account charge) peeking. changes from month to month, depending on how much gas you use. you use. and more efficient equipment can lead month, depending on how much gas to lower costs. Section III: Matching Julia called CUB to learn how she 7. Natural gas and oil producers made huge profits in the third quarter of could make her home more energy Grade your Performance 2005, while consumers paid record-high gasoline and heating prices. Match efficient. With natural gas prices at 0-3 Correct—Don’t worry, you’re the company to the third-quarter earnings. record highs and December temperatures at record lows, CUB is showing not alone. Call CUB for a free BP Plc. $9 Billion copy of “Making Sense of Your consumers how to save energy and Gas Bill.” Chevron Corp. $6.5 Billion reduce their heating bills. 4-5 Correct—Not bad, but One of the most effective ways to there’s room for improvement. ConocoPhillips $3.6 Billion save energy is to prevent warm air 6-7 Correct—Impressive! You’ve from leaving the house. Weatherstrips and insulation should be add- mastered that mysterious language Exxon Mobil Corp. $3.8 Billion called “Gas Bill-ese.” Royal Dutch Shell Plc. $9.9 Billion (American Record!) ed to an attic hatch or door. Holes from ducts and plumbing or electrical runs that lead to the attic should be sealed. Doors and windows should Road to $196 million refund be caulked. Insulation can be added Historic Refund in the walls and ceiling to prevent A breakdown of the $196 million refund package for Peoples Gas and The furnace filter should be re- heat loss. package began with CUB Continued from p. 1 North Shore Gas customers. possible choice between heating or placed regularly because a dirty air from the City of Chicago and the Illinois Attorney General’s office. They or Richard Daley and Attorney Gen- Customers will receive a $50 credit unit work harder, wasting energy eating,” Kolata said. “Thanks to May- $100 Million Credit. filter reduces airflow and makes the also joined CUB in asking the ICC to eral Lisa Madigan, this settlement as early as March and an additional $50 credit within 12 months. Set the water heater to the warm and money. order a big refund. will give consumers some relief.” setting, 120 degrees. Cover the wa- However, any “Too many customers face relief ordered by the impossible choice between heating or eating.... Under the proposed agreement, Customers save at least $3 for every an insulating blanket, which will $30 Million Weatherization Program. ter heater, not the thermostat, with a civil court or the ICC was likely to be delayed average about the value exceed the funding. if your utility company will pro- the credits, which $1 spent on weatherization, making pay for itself within the year. See This settlement will give for months, even consumers some relief.” $100 per household, would go to vide these at a discount or offer a years, by legal -David Kolata $14 Million to Turn on Gas. rebate. challenges. CUB executive director Peoples Gas and Customers disconnected for nonpayment will have their debt forgiven than 68 degrees during the day and A furnace should be set no higher The $196 million North Shore Gas settlement gets substantial benefits customers in two installments. The and their reconnection fees waived. 62 degrees at night. Consumers can to customers quickly, before the end first $50 credit would come within a save two percent of their heating $52 Million to Forgive Bad Debts. of a winter heating season that has month of being approved by the ICC. bills for each degree they turn down This amount, usually built into seen record-high natural gas prices. The second would come within a year their thermostats. However, senior consumers’ rates, will be erased. “Too many customers face the im- of that. Continued on p. 6 Winter 2005-2006 5
Page 1 and 2: Winter 2005-2006 A Publication of t
Page 3: CUB study: Exelon a profit giant no
Page 7 and 8: The answers to CUB’s gas-bill pop

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