|
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
Download copy
To download an Adobe Acrobat version of
"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 Nicor Gas, with the same degree of uncertainty about what the actual price will be. The prices are tied to the suppliers’ 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, and they will inflate the advertised price. Some suppliers charge a monthly fee. Also, Nicor Gas charges all program participants a “Customer Select” fee. The charge helps cover “balancing” costs for maintaining appropriate pressure in Nicor’s pipe system. Also, beware of an “exit” fee if you want to get out of your plan before the term of service ends. Companies may have an “opt-out period” during which a customer can exit without being penalized. Find out when that period begins and ends. What about some alternative suppliers’ billing methods? Like Peoples Gas, the utility, an
Current Choices For You prices as of Nov. 12, 2008
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 U.S. Energy Savings Corp. 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, “Customer Select” 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 “Customer Select” too confusing or too risky, you’re not alone. |