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January 14, 2004
NAPERVILLE, Ill. — Nicor Gas today reinforced to customers that signing up for the Budget Plan, employing energy efficiency and evaluating bill-payment programs are useful options to help manage higher gas bills this winter. There may also be financial assistance for qualifying applicants. At present, Nicor Gas' monthly gas supply charge (GSC) is 69 cents per therm, up from 58 cents for December 2003.
There are several ways in which Nicor Gas customers can obtain useful information about the national factors that influence natural gas costs and how it affects their gas bills locally. Information about bill-payment programs, financial assistance for those who qualify and energy conservation is posted regularly in customer gas bills and bill inserts, and it can be found at the Web site at www.nicorgas.com. Customers can also call Nicor Gas' toll-free number at 1 888 Nicor4u (642-6748) to speak directly to a customer representative.
"It's important for consumers to be informed on this issue," said Ted Lenart, assistant vice president supply operations for Nicor Gas. "Natural gas prices are higher nationally and the pricing environment remains volatile. Weather has an enormous impact on prices because temperatures drive the quantity and rate at which natural gas is consumed. What we've seen thus far is that usage levels have been lower than what is customary for the early part of winter due to warmer-than-normal weather."
The volatile nature of natural gas prices can be seen in the following comparison of the January GSC over the last three years:
• January 2003 — 54 cents
• January 2002 — 27 cents
• January 2001 — 95 cents
To provide some perspective on how the current GSC of 69 cents could impact customers' natural gas expense for January 2004, the following chart features estimated total gas bills for three sizes of homes:
| House Size |
Typical Usage |
Cost Per Therm (GSC) |
Estimated Total Bill* |
| 1,000 to 1,500 sq. ft. |
244 therms |
69 cents |
$195 |
| 2,000 to 2,500 sq. ft. |
278 therms |
69 cents |
$220 |
| 3,000 to 3,500 sq. ft. |
309 therms |
69 cents |
$245
|
*Bill estimates assume that natural gas is used for a home furnace, cooking range, clothes dryer and water heater and base distribution costs and taxes of $0.024 per therm used. Estimates do not account for mid-month billing cycles, the efficiency of home insulation and/or the working condition of the noted natural gas appliances. Many factors can cause customers' gas bills to vary greatly from household-to-household and from business-to-business.
As Lenart explains, natural gas utilities across the nation were challenged in preparing for winter due to the situation of short supplies and higher prices. For example, the natural gas that Nicor requires to fill storage in preparation for winter's demand cost 50 percent more this past summer compared to summer 2002. The cost that Nicor pays for the gas is then passed on to customers once the gas is used. (Nicor earns no profit on the gas itself.)
To help stabilize the gas costs that are passed on to customers, Nicor relies on several strategies. For example, the Company owns several storage fields that are used to store natural gas that is then available to help meet winter peak-day demand. In addition, Nicor also utilizes purchasing strategies, such as employing financial contracts, to provide price certainty on a portion of the winter purchases of natural gas.
"Our first responsibility is to ensure a safe and adequate supply of natural gas to meet customer demand," Lenart adds. "Second is stabilizing the gas costs that are passed on to customers and our commitment to informing our customers about this national energy issue."
To learn more about higher gas costs and/or to receive important information that can help with managing winter gas bills, visit Nicor on the Web at www.nicorgas.com or call us at 1-888-Nicor4U (642-6748).
Nicor Gas is one the nation's largest gas distribution companies. Owned by Nicor, Inc. (NYSE: GAS) a holding company, Nicor Gas has provided safe, reliable and cost-effective natural gas services for 50 years. The Company serves two million customers in a service territory that encompasses most of the northern third of Illinois, excluding the city of Chicago. For more information, visit the Nicor Web site at www.nicorgas.com. |
