“How do I make sense of the proposed natural gas delivery charge?”
Peoples Gas and North Shore Gas want customers to know about some changes that may take place in the customer bills in the coming months. After 12 years of holding the line on the price we charge to deliver natural gas, we are now seeking an increase in this charge. Each customer's increase will vary based on the type of customer. However, in general:
- A typical residential Peoples Gas customer who uses gas to heat their homes as well as for cooking and hot water will see an increase of less than $10 per month.
- A typical residential Peoples Gas customer who uses gas for cooking and hot water only will see an increase of less than $4 per month.
- A typical residential North Shore Gas customer who uses gas to heat their homes as well as for cooking and hot water will see an increase of less than $5 per month.
- A typical residential North Shore Gas customer who uses gas for cooking and hot water only will see an increase of less than $4 per month.
If approved, the new delivery charges would take effect in early 2008.
Although the cost of almost everything has gone up, we've worked hard to keep our delivery charge the same. Even so, we understand that you have seen increases in your gas bill. That's because the cost of natural gas itself has risen dramatically since 2000 and the cost of gas is about 70% of your bill. We buy natural gas on your behalf from multiple suppliers. You pay us and then we pass that payment on to them. There is no profit to us on that part of the bill. Our charge to deliver natural gas to customers is about 20% of the bill and taxes make up about 10% of the bill.
Why Do We Need the Increase Now?
We have continued investing in our system for the past 12 years, without a delivery charge increase, keeping safety and reliability as our top priorities. But, cost cutting measures alone are not enough to allow us to run the business in the manner you expect.
For the future, we intend to continue to improve our natural gas delivery system. We will continue to invest in it to efficiently maintain our 6,000 miles of natural gas pipeline used to deliver gas to nearly one million customers. To do this, we propose accelerating the upgrade of the system using state-of-the-art technology and materials.
We will put your dollars to work by seeking ways to upgrade technology to minimize cost and provide excellent service by:
- Proposing an energy efficiency program to help reduce energy usage and monthly bills;
- Replacing cast iron mains with newer materials that will ultimately make our maintenance and repair work less disruptive;
- Completing our automated meter reading program to eliminate estimated bills;
- Continuing to make it easier and more convenient to set up accounts and pay bills both online and over the phone;
- Automating and tracking initiatives to meet all safety requirements set by federal and state regulators.
Natural Gas Usage is Declining
Over the years, we've helped customers learn how to reduce their gas usage by weatherizing their homes, using energy-efficient equipment and improving building construction. This is great news for customers and our community. However, sending less gas through our delivery system does not lower our operating costs. Our system - and our people - must still be there to do the job safely and reliably. These are the fixed costs of delivering natural gas and responding to inquiries and emergencies around the clock, when we are needed.
How much will the increase be?
You have choices
We Can Help Customers Manage Their Bill
If you have any questions, please feel free to e-mail us at KeepingUwarm.