Thursday, August 14, 2008 10:07 PM CDT
Ameren: Gas bills likely to rise 20-30 percent
By TONY REID, Staff Writer
DECATUR — Ameren Corp’s Illinois utilities have warned customers their winter heating bills are set to come in a whopping 20 percent to 30 percent more than last year, thanks to the spiking price of natural gas.
The Central Illinois utilities — AmerenIP, AmerenCIPS and AmerenCILCO — buy gas all the time in a complex strategy of “hedging,” trying to lock in prices at low points as they secure enough supplies for the upcoming winter.
The utilities say they’ll have adequate gas on hand to meet demand, but they haven’t found many price breaks. The latest gas prices for August alone show dramatic increases over this time last year. AmerenIP customers, who paid the highest prices a year ago at 89.48 cents per therm, will now be paying 135.44 cents per therm, the highest again among the three utilities.
For AmerenCIPS, the year ago price in August was 85.25 cents per therm and is now 119.93; in AmerenCILCO territory, the price per therm a year ago was 81.76 and now stands at 129.69.
The only good news is that, at least for now, there is no more bad news.
“A bright spot in our outlook is the fact that natural gas prices have somewhat stabilized in recent weeks,” said Scott Glaeser, vice president of gas supply and system control for the utilities.
“We are cautiously optimistic that the most significant increases in the price of natural gas for this year are behind us.”
Ameren has been at pains to point out that it only makes a profit from the delivery charge it imposes for bringing natural gas and electricity to homes and businesses. The wholesale costs of electricity and gas are passed on without a markup. Customers getting sticker shock when they open that envelope, however, don’t always see the distinction.
“I think it’s still going to take time for people to fully appreciate that we are the UPS of the utility business,” said Leigh Morris, Ameren Corp. spokesman.
“Figuratively speaking, we’re driving that brown truck around carrying either electrons or natural gas molecules and delivering them to customers’ houses and businesses,” he added, saying the utilities have no control over the wholesale price of gas and power.
“We are nothing more and nothing less than a delivery company.”
That said, however, the utilities currently have a request pending before Illinois state regulators asking for a hike in gas and electricity delivery fees worth more than $200 million. An administrative law judge involved in the process has recommended that the utilities get $163.5 million instead, while the regulators themselves — the Illinois Commerce Commission — must make their final ruling by Sept. 30.
For consumer watchdog groups, wholesale gas price hikes and delivery fee rate increases add up to a grim picture for consumers already struggling.
“Our basic thing is, could the timing of all this be any worse?” said Scott Musser, who follows the utilities industry for AARP Illinois.
“The economy is in a real bad situation, and now we’re going to be paying record high prices for natural gas this winter; it’s just adding on to a terrible situation.”
AARP also is continuing to oppose the reduced delivery rate fees recommended by the judge. It fears utility customers, particularly the elderly, will risk their health by cutting back on heating this winter because of worry over paying the bill.
“About the only thing we can hope for right now is a mild winter,” Musser said.
Contact Tony Reid at treid@herald-review.com|421-7977.
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coonbug wrote on Aug 15, 2008 9:11 AM:
Seriously, is supply down or demand up? Why else would prices rise? Remember how Calif was abused back in 2000 and companies kept denying they were lying? Bush finally admitted after about a year or so that it was true. Companies were robbing people blind. "