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CUBFacts
The “Choices for You” program allows Peoples Gas and North Shore Gas customers
to choose an alternative company to supply their natural gas.
"Choices For You"—Making the Right Choice How does it work? Traditionally, a utility buys gas on the market and uses its pipelines to
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"Choices For You"
deliver fuel to your home. The utility is supposed to sell the gas at the same
price it pays, with no markup. Opting for “Choices for You” means you will
continue to pay Peoples Gas or North Shore Gas to deliver the heating fuel to
your home, but you will pay a different company to buy and supply the actual
gas. Unlike your utility, the rates and services of your new supplier will not
be regulated or reviewed by the Illinois Commerce Commission (ICC). Your new
supplier charges whatever it wants.
—Making the Right Choice. What kind of plans do the companies offer? Most of the plans fall under one of two categories. Fixed-rate plans won’t change for the length of the contract. Their simplicity may be appealing but such plans will likely charge a premium price, and you could lose money in the long-run. Variable-rate plans fluctuate from month to month. These plans offer the same kind of pricing as Peoples/North Shore Gas, with the same degree of uncertainty about what the actual price will be. The prices are tied to a supplier's cost of gas or some market indicator of gas prices, plus a markup. When you opt for a variable rate, you’re betting that the new supplier can do a better job buying gas than the utility. That may not be a good bet. Are there other charges? Yes. Some suppliers charge a monthly fee. The companies also slap you with a separate “balancing” charge. It helps cover “balancing” costs for maintaining appropriate pressure in the utilities’ pipe systems. Beware of an “exit” fee if you want to get out of your plan before the term of service ends. Most companies have an “opt-out period” that allows a customer to exit without being penalized. Know when that period begins and ends. What about some alternative suppliers’ billing methods? Like Peoples Gas, the utility, an
Choices For You prices
alternative company buys more gas than customers actually use in the summer and
stores the extra for winter usage. Unlike Peoples Gas, some suppliers may bill
customers for the extra gas immediately—before they actually use it. This has
led to unexpectedly high summer gas bills, and confusion, for some customers.
Companies that use this method have said it can lead to lower winter bills and
overall savings in the long run. But nobody can guarantee savings.
Integrys Energy Services Nicor Advanced Energy Nordic Energy Services Santanna Energy Services Just Energy (formerly U.S. Energy Savings Corp.) What new consumer protections just became Illinois law? A new state law mandates that any customers signing up with an unregulated supplier on or after April 10, 2009... -Have up to 10 days to cancel their contracts—once the supplier’s charges first appear on the gas bill—without paying a cancellation penalty. -Can’t pay a cancellation penalty higher than $50. -Must give consent, through a signature and a third-party verification process, before they’re signed up for a door-to-door offer. Should I participate in “Choices For You”? There’s no guarantee you’ll save money. In fact, CUB’s Gas Market Monitor shows that consumers are much more likely to lose money with unregulated gas companies. Remember, “Choices for You” is optional. If you don’t sign up, you will continue to be served by Peoples Energy or North Shore Gas, with rates regulated by the ICC. If you find “Choices for You” too confusing or too risky, you’re not alone. |
