Consider natural gas choice carefully
Hancock County Journal-Pilot - March 29, 2006
By Doug Endres
Natural gas deregulation for residential customers has its pros and
cons, according to consumer protection groups, gas companies and
natural gas price consultants.
Nicor Gas, which serves the majority of Hancock County, introduced a
pilot program called Customer Select in 2002. Customer Select follows
the deregulation of natural gas for large commercial customers in
1986. It gives residential customers a choice of where they buy their
Nicor area supervisor, David Schoof, spoke with the Carthage
city council in late February after city hall was contacted by a gas
supplier wanting to know the local permits needed to go door-to-door
in the city.
Schoof said a gas bill has three basic parts: a monthly customer
charge, which is a flat fee; a distribution charge; and a gsc, or gas
supply charge. The gsc charge is anywhere from 50 to 75 percent of
the bill. This is the charge for the natural gas itself.
“Nicor makes its money on the monthly customer charge and the
distribution charge,” said Schoof. “The gsc charge is the price for the
natural gas. It fluctuates as the market prices do if you're on a
Customer Select is Nicor's specific deregulated program. Other
suppliers like Ameren CIPS have its own programs. Suppliers who are
licensed to do business in Illinois are listed on Nicor's site, at the
Illinois Commerce Commission website, www.icc.illinois.gov, or call
the ICC and talk to someone in the Consumer's Affairs Division
“You don't have to have another company supply your natural gas,”
said Schoof. “It's your choice.”
B. J. Hilton, president of Midwest Energy Alliance, is a utility rate
consultant who advises non-residential customers on the best rate for
them in the market. Hilton said it's important to know the ins and outs
of the contract before signing.
“What worries me is I see people sign contracts who don't understand
the terminology,” said Hilton. “Some people don't receive a written
contract, which is worrisome.
“One major supplier (Santanna) recently offered a guaranteed fixed
price for five years under an oral ‘agreement' and then promptly
reneged on the agreement last fall when gas prices soared.”
Below are some questions to ask a prospective supplier.
€ What pricing options are available to me?
€ Will the price you charge vary? If so, how?
€ What are the terms and length of the contract?
€ Are there penalties or exit fees if I cancel my contract?
€ How will I be billed and by whom? How often?
€ Do you offer any payment plans or electronic payment options?
€ In addition to the cost of gas, what other charges will I see on my
€ If I have questions about my charges for the cost of natural gas,
whom do I call?
€ Are there any customer services, special programs or incentives that
are part of your package of services?
“Look carefully for any provision in the written contract that would
allow the supplier to change the price during the term of the contract,”
said Hilton. “This is a common element.”
“Ask the broker to leave any paperwork with you,” said Schoof. “Take
some time to study the contract before signing anything.”
Schoof said Nicor does not send representatives door-to-door, and
they always carry ID tags. Never give out your account number,
number of therms used the previous month, or meter number to
anyone unless you are signing a contract with them. Identification of
anyone claiming to be from Nicor can be checked by calling the local
office at 217/357-3105.
Schoof said Nicor has built-in precautions to help stop slamming.
“We keep a record of who we talked to when someone signs up,” he
said. “Anyone switching to another gas supplier has to submit a signed
contract with the broker.”
Hilton said she hasn't seen anyone save any money by buying from an
“The companies selling the natural gas usually sell it at a high rate for
a long-term fixed price,” she said.
CUB (Citizen's Utility Board) offers a Gas Market Monitor at its website
which tracks the monthly price offers of alternate gas suppliers, and
compares them to the prices offered by gas distributors. The website is