Nicor customers should expect the cost of heating their homes this winter to put a significant dent in their wallets, consumer advocates warn.
According to Nicor's estimates, the typical household will pay about $674 on heating bills from November through March. That's an increase of 48% compared to the $455 paid by the same residential customer over the five-month season last year.
The Naperville-based utility giant supplies natural gas for more than 2.2 million residential and business customers across northern Illinois outside Chicago. Nicor passes market prices for gas directly to consumers without markup, charging separately for delivery on monthly bills.
"These are still projections, but given the Nicor gas rate increases of the last few years, plus higher natural gas prices for the commodity, it's looking like it's going to be a tough winter for consumers," said David Kolata, executive director of the Citizens Utility Board, a Chicago-based consumer watchdog.
Historic cold weather that gripped Texas in February, freezing natural gas pipelines and pinching off supplies, sent natural gas prices "through the roof," Kolata said. Those costs are still being passed on by utilities, he said.
In general, natural gas prices also have risen because of issues related to supply and demand as the economy has recovered from the pandemic, Kolata said.
"We're still in the pandemic, but when things were really, really slow, a lot of production of gas kind of was scaled back," he said. "And so when you put a growing, if not perfect, economy together with these supply constraints and then you have these exogenous shocks like the Texas extreme cold and Hurricane Ida, it can raise prices."
Nicor spokeswoman Jennifer Golz also cited an "unforeseen increase" in gas costs due to the February winter storms for the company's heating bill projections.
"Our estimate also accounts for increasing market prices of the commodity," Golz said.
Nicor's estimates do not yet account for a delivery rate increase request pending before the Illinois Commerce Commission. State regulators are expected to decide before the end of the year.
The Citizens Utility Board opposes the company's request, the third rate hike sought by Nicor in four years.
"Underlying all of this is that the natural gas system is increasingly unaffordable for consumers," Kolata said. "And it's also in direct conflict with what we need to do to respond to our climate change challenges, because while we don't have to do it overnight, we do need to transition to high-efficient electric heating by 2050 if we are going to meet our state and national goals."
Nicor's gas supply charge has averaged 53 cents per therm, a measurement of heat, from April through September, according to the Citizens Utility Board. Last year, the prices averaged about 25 cents a therm.
"We have to hope for a warm winter, because if there's a really cold month, it's just going to be a huge, huge, huge problem," Kolata said. Customers are advised to weatherize their home, seal cracks and leaks, and invest in energy efficiency improvements to the extent that it's feasible.
Nicor has provided $68.9 million through energy assistance programs for customers since January 2020, said Golz, the spokeswoman.
In the coming weeks, Nicor plans to announce a new partnership with the Salvation Army to provide additional assistance to customers. The company also continues to offer deferred payment arrangements and a budget plan to allow customers to manage costs.
"We know this continues to be a hard time for many in our communities," Golz said. "Our goal since the beginning of the pandemic continues to be ensuring those customers most in need have options and support."
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