As a resident of the great state of Illinois, you have the power to select the company that provides the supply portion of your natural gas service. You can purchase your natural gas from your local utility or from an Alternative Gas Supplier (AGS).
No matter who you choose to supply your natural gas, your local natural gas utility company will continue to deliver that gas to your home or business. What’s important is that you’re not stuck with the old, one-size-fits-all service. You can choose the provider and services that fit your family’s lifestyle needs.
Who Makes Illinois Natural Gas Choice Work
If this is your first time buying natural gas for your Illinois home, or you’re looking for a better energy deal, you might be confused by all the information about price, supply, and delivery. To better understand how Illinois natural gas choice works, it helps if you understand who does what. Let’s start there.
The Illinois Commerce Commission (ICC) regulates public utility services in the state, including natural gas and electricity. It regulates and approves rates, certifies retailers, sets marketing practices and policies, and enforces compliance. It also develops rules for consumer protection and safety. It regulates natural gas utility pipelines, infrastructure, gas markets, and utility rates. It also oversees gas supplier sales and marketing practices to residential and small commercial customers, and then assists with customer disputes. While the ICC certifies and licenses whether or not an AGS can do business in Illinois, it does not regulate their prices.
The Illinois Legislature established the Citizens Utility Board (CUB) to protect the interests of residential and small business utility customers. As a nonprofit and nonpartisan organization, the CUB is funded by its members and by a grant from the Illinois Clean Energy Community Foundation.
A Local Distribution Company (LDC) is one of the three old utility companies that once held a marketing and distribution monopoly in northern Illinois.
Each LDC now allows AGSs to sell natural gas service in its territory. These local utilities still maintain, repair, and handle gas delivery, and they act as providers of last resort for customers if a retailer leaves the market.
Each LDC buys gas from producers and marketers at the lowest price possible and then pass that cost onto customers with no markup. The prices must be approved by the ICC and can vary monthly, using a regulatory mechanism called the Purchased Gas Adjustment (PGA) to compute your monthly gas supply cost. During extremely cold winter months, the expense can be an extra burden to customers.
An Alternative Gas Supplier (AGS) is a third party retailer who competitively sell natural gas supply to customers. AGS rates are controlled by market prices, so it’s important to understand that prices, terms, and contract conditions will vary between gas supplier companies and that these will effect your natural gas bill. Each AGS must pay for gas, pipeline transportation, and storage many months before it is needed by its customers.
By shopping competitively, retail suppliers can utilize a variety of options for buying and pricing their natural gas in Illinois. Because they compete against each other, they also offer great incentives to win and keep their customers.
Understand the Basics
No matter whether you buy service from your LDC or AGS, consider these three things as you shop for a natural gas supplier:
- Price: Are the rates competitive? Are there any expensive fees? How do the rates or plan compare?
- Services Offered: How’s the customer service? Are the incentives good? How does the company rate?
- Financial Stability: How financially stable is the company? How long has it been in the energy market?
A Note about Billing
Your Illinois natural gas bill has three main components:
- The gas supply charge
- The delivery service charge
That delivery charge is the cost of transporting or delivering natural gas to your home through the pipeline network operated by the utility company for your area. This rate must be approved by the ICC, and it’s the same for all customers regardless of whether you buy your gas from your utility company or an Alternative Supply Company.
Let’s Go Shopping!
The ICC Natural Gas Choice web page contains a list of certified AGSs and their current offers. The first price quote will be for your local utility and state the “Current Month Gas Supply Charge per therm”.
Below, it will list the suppliers with their rates and plans:
Supplier: the name of the supplier and web address link to their company web site. By checking the box next to the supplier’s name, you can use the “Compare” function at the top of the list to compare plan offer details side by side. You can also click the “Details” link to learn about the plan.
Today’s Price per Therm: the current price of natural gas by the therm, including whether it is a fixed or variable rate. An average home furnace uses about one therm per hour of heat production. Fixed rates feature prices that will not change during the length of the contract term. You may pay more when prices fall, but you’ll be protected when prices spike. Variable rates will change monthly. You might save money when prices fall but you will pay more when prices spike.
Description: a brief description of the plan.
Additional Fees: states other fees, such as monthly service, administration fees, and more.
Term: describes the length of the contract, such as month-to-month, or the term length in months.
Termination Fees: states whether or not you will pay a termination fee if you end the agreement early and how much that costs. State law caps cancellation fees to $50.
Before You Sign, Ask Questions
As you examine offers from different providers, you’ll want to compare their plans and terms of service. Often, these contracts carry other fees that you’ll want to be aware of before you sign on with any service provider. Make sure you fully understand the terms of service and that you have the answers to the following questions:
- What is the price per therm?
- Is this a fixed price or variable price?
- How long will the price remain in effect?
- Does this price include a monthly charge/fee?
- Are there any late fees or other fees?
- What is the length of the contract?
- Is there an automatic renewal?
- Does the price change?
- How much notice must I give if I don’t wish to renew?
- Is there an early termination/cancellation fee if I switch to another supplier before the contract period ends?
- Is a security deposit, enrollment, or other similar fee required?
- How will I be billed?
- What are my monthly savings if I switch providers?
Right of Rescission
Even if you sign a contract, Illinois state law gives you a chance to change your mind with the Right of Rescission, which states:
- You have the right to rescind their agreement without penalty within 10 business days after the date the gas utility processes a change request. You must contact the utility or the AGS to rescind the switch.
- If the plan has an early termination fee, you have the right to terminate an agreement with an AGS without incurring an early termination penalty within 10 business days of the date the first bill is issued. You will of course have to pay for any gas that you have used.
- If you choose to go back to purchasing gas from your utility, you have 120 days to either choose a new AGS or you will be required to remain on your LDC’s supply service for one year.
If you have problems with your service, contact your AGS first.
Happy natural gas shopping in the Land of Lincoln!