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May 21, 2001
Naperville, Ill. – Nicor Gas has filed with the Illinois Commerce Commission a June 2001 Gas Supply Charge (GSC) of 40 cents per therm, 5 cents lower than the GSC from June 2000. This is the first time in a year that the natural gas cost for any 30-day billing period has been lower than the previous year.
While consumer consumption of natural gas is low during the summer, the filing is significant because Nicor Gas is currently purchasing natural gas to fill its underground storage facilities to prepare for next winter's heating season.
"This is moderately good news, although it doesn't mean we're returning to the era of cheap natural gas that we experienced in the 1990s," said Lonnie Upshaw, vice president supply and technical services. He noted that June GSCs ranged from 22 cents to 33 cents per therm from 1996 to 1999.
"The national market for natural gas is a basic function of supply and demand," Upshaw explained. "On the supply side, drilling for natural gas is at a recent high. There are nearly 1,000 natural gas directed drilling rigs in operation today versus 651 at this time a year ago. And, production is expected to grow for the first time since the mid 90s by a modest but significant two percent."
Due to the relatively high prices since this past winter, demand has declined in all sectors. "In the industrial market, decreased usage is the result of switching to alternative fuels as well as lower manufacturing output overall because of the economic slowdown," he explained. "And consumers have responded through conservation, which has resulted in a five to 15 percent reduction in the residential sector nationally."
The GSC is the charge applied to gas usage during June. Natural gas costs on bills may differ from the natural gas cost reported here because a billing period usually spans more than one calendar month. The natural gas cost for any 30-day billing period is an average based on the number of days in each of those months. The GSC represents the commodity costs Nicor Gas incurs and passes on to its customers without markup.
Nicor Gas serves nearly two million customers in a service territory that encompasses most of the northern third of Illinois, excluding the city of Chicago. The company has provided reliable natural gas services for more than 45 years. Nicor (NYSE: GAS) is a holding company. Its principal businesses are Nicor Gas, one of the nation's largest gas distribution companies, and Tropical Shipping, a containerized shipping business that operates between Florida and the Caribbean. Nicor also owns several energy-related subsidiaries and is a partner in Nicor Energy, a provider of unregulated energy products and services. For more information, visit the Nicor web site at www.nicor.com. | 
