Natural gas should be about 26 percent cheaper this fall and winter based on estimates from Ameren Illinois Utilities. Whether the savings eventually will be more than offset by increases in delivery charges for the gas and electricity is a question that will be before state regulators Tuesday, when the Illinois Commerce Commission holds public hearing on the company’s request for a $45 million hike in delivery rates for natural gas and $180.6 million for electricity.
Natural gas should be about 26 percent cheaper this fall and winter based on estimates from Ameren Illinois Utilities.
Whether the savings eventually will be more than offset by increases in delivery charges for the gas and electricity is a question that will be before state regulators Tuesday, when the Illinois Commerce Commission holds public hearing on the company’s request for a $45 million hike in delivery rates for natural gas and $180.6 million for electricity.
Ameren announced the expected drop in wholesale prices, assuming a typical winter, last week. The local hearing is the first of three.
The company has about 840,000 natural gas and 1.2 million electric customers in the southern two-thirds of Illinois.
Company vice president Scott Glaeser said in the announcement the global recession and a significant drop in energy demand are driving down the price of both crude oil and natural gas.
“Furthermore, we have the majority of our natural gas supplies hedged, or price protected, for the upcoming winter to insulate our customers against market volatility,” said Glaeser.
Most of that volatility has been toward the down side of natural-gas prices in the past year, said Phillip “Doc” Mueller, vice president of government affairs for the Illinois Municipal Utilities Association.
But Mueller said energy price spikes in the summer of 2008 show just how quickly markets can turn.
“So much of the price is commodity driven, and we’ve seen it come down significantly in the last year or so,” said Mueller “On top of the economy, we have had a remarkably cool summer. From a weather standpoint, we didn’t have that one to two months of 80 and 90-degree days, and high humidity.”
Citizens Utility Board executive director David Kolata said the lower wholesale gas prices announced by Ameren should mean lower monthly bills. But the group also is pushing for a big customer turnout at the Tuesday hearing.
‘It’s good news that the price of gas has come down … but Ameren certainly sought, and in some cases, won rate increases, and is seeking another rate increase right now that has the potential to take any savings away,” said Kolata.
Ameren contends the increases are needed to keep up with the cost of delivering natural gas and electric services.
Commission spokeswoman Beth Bosch said there are no plans to relocate the meeting based on initial response for public comment, but she said a crowd is expected.
“That usually happens in Ameren cases these days,” she said.
Though the hearings are considered informal, comments will become part of the official ICC record on the rate-hike request. Commissioners are scheduled to rule on both the natural gas and electric rate request in May 2010.
Tim Landis can be reached at (217) 788-1536 or email@example.com.
The Illinois Commerce Commission has scheduled three public hearings on a request from Ameren Illinois Utilities for an increase in delivery charges for natural gas and electricity. Each of the hearings begins at 7 p.m. on the following schedule:
_Tuesday in hearing room A of the Illinois Commerce Commission offices, 527 E. Capitol Ave., Springfield.
_Monday, Oct. 5 at the Kenneth Hall Regional Office Building, 1100 Eastport Plaza, Collinsville.
_Tuesday, Oct. 27 in the Pekin City Council Chambers, 111 S. Capitol St.
Falling natural-gas prices
Annual gas costs in 2009 compared to 2008, based on average residential usage and rates.
_AmerenCIPS: $669.32; $716.44.
_AmerenCILCO: $626.99; $790.19.
_AmerenIP: $634.13; $780.22.
Source: Citizens Utility Board
Wholesale and delivery rates, what’s the difference?
_The wholesale price of natural gas is reflected in the “purchased gas adjustment.” The PGA rises or falls depending on the wholesale price and is passed through to customers in monthly bills.
_Delivery rates are based on the cost of providing natural gas and electric service. A public hearing in Springfield this week is on a proposed increase in those basic rates.