On February 25, 2009, Peoples Gas filed a
request with the Illinois Commerce Commission (ICC) to increase the rates it charges to
deliver natural gas to customers. The increase would be used to maintain the safety and
reliability of the company's delivery system, which includes
4,000 miles of gas mains and 500,000 service pipes. In the coming months, the ICC will
review the proposal, with input from the company, consumer groups, customers and public
officials. The proposed rate changes would take effect in January 2010. The increase
would not apply to the price of natural gas - only the rates associated with the
delivery of natural gas.
If your question is not answered here, or if you'd like further information,
please contact us.
Why has Peoples Gas asked for a rate increase?
Peoples Gas faces many of the same
economic pressures as companies all over the nation, from tighter credit markets
to increased operating expenses. About 75 percent of the proposed rate increase
would be used to maintain and upgrade the infrastructure that delivers natural
gas to 840,000 customers throughout Chicago. The remaining 25 percent would be
used for rising administrative and back office costs and increasing employee
health care expenses.
The proposed rate changes will allow
Peoples Gas to maintain and upgrade its
infrastructure efficiently in a way that enhances the system's safety and
reliability. The company also will continue funding programs like
Share the Warmth for low-income customers and
promoting the Chicagoland Natural Gas Savings Program,
which offers rebates to customers who make energy efficient upgrades.
Given the current state of the economy, what is the urgency?
It's never a good time for a rate increase and
Peoples Gas filed this rate case with a
great deal of reluctance. While numerous factors have driven up overall costs in the
last two years, the company's current rates remain based on 2006 expenses,
unadjusted for inflation. Like any other company,
Peoples Gas must be able to charge rates
that reflect the cost of doing business today - not the cost of doing business
in 2006.
Why can't Peoples Gas postpone some
of its planned infrastructure work?
Peoples Gas has consistently invested
in infrastructure to ensure the long-term safety and reliability of its system.
In addition to ensuring safety and reliability, it makes good business sense to
upgrade infrastructure because it's always more affordable to make improvements
now instead of emergency repairs later.
What steps has the company taken to reduce its costs?
Peoples Gas has realized an
operational savings of $11.3 million. Those savings are reflected in the
current rates that customers pay. More recently, to address the current
economic climate, Peoples Gas has:
Frozen hiring, except for positions that impact public safety and system
reliability; and
Eliminated salary increases for senior officers and board members.
The company is currently in the process of implementing a wide range of other
cost-saving measures based on a comprehensive review of all of its expenditures.
How much would bills increase for residential customers?
On average, the typical bill for residential customers of Peoples Gas
would increase by about $12 per month. That represents an average increase of
about 9.6 percent on an annualized basis.
Delivery rates for Peoples Gas
customers last changed in February 2008. Those rate changes were based on the
company's costs in fiscal 2006. In other words,
Peoples Gas is doing business today
based on rates set using 2006 data, unadjusted for inflation.
If rates haven't increased since 2008, why have gas bills increased recently?
That increase is due to the rising costs of natural gas during the first half
of 2008, as well as increased consumption due to the colder-than-normal weather in
December and January. Peoples Gas does not control the costs of gas, nor does it
profit from them. The company purchases gas from suppliers at market rates and
delivers it to customers without a markup. These natural gas costs make up about 70
percent of the typical gas bill.
It's impossible to predict when there will be a need for another rate change.
The company acts responsibly to manage its costs to provide safe and reliable
service. It continually monitors costs and seeks rate changes only when necessary.
Peoples Gas has a long history of
working with community organizations and government to help low- and fixed-income
customers meet their energy needs. In addition to payment arrangements that allow
struggling customers to pay down their bills over time, the company works with
customers to obtain grants to help pay bills. It also funds the
Share the Warmth program, which provides matching
grants to at-risk customers, and supports programs to help customers understand
how to better manage their energy use.
What help is available for customers who don't qualify for low-income assistance?
Peoples Gas works with customers who
need more time to pay their bills by offering payment plans that allow them to get
caught up over the course of several months. Additionally, the company encourages
customers to enroll in its Budget Payment Plan,
which spreads an entire year's costs evenly over 12 months. It also promotes
conservation and energy efficiency through its web site and
Customer Connection newsletter, and promotes a
program that offers rebates to customers for energy efficient upgrades.
What types of energy efficiency programs are available to customers?
A new initiative called the Chicagoland Natural Gas Savings Program
offers rebates to customers who make certain types of
energy-saving upgrades to their homes or businesses. Customers can receive rebates
of up to $750 for insulation, $600 for boilers, $450 for furnaces, $400 for water
heaters and $100 for clothes washers. You can find out more by calling
866-964-7345.
