Peoples Gas and North Shore Gas are inviting customers to use less natural gas. That's the result of an innovative tool used in 12 other states and recently approved by the Illinois Commerce Commission.The tool, called "decoupling," disconnects the amount we charge to deliver gas (about 20 percent of the bill) from customers' energy use and taxes (about 80 percent of the bill).
Here's how it works. Before decoupling, the delivery charge increased when more gas was used and decreased when less was used. Advocates of decoupling, including leading national environmental advocates, realize this doesn't make sense given the increased cost of natural gas. They encourage state regulators to consider decoupling as a way of aligning utilities and customers on conservation.
It is vital to understand that the costs of delivering natural gas are "fixed."Over 95 percent of costs to run the 6,000-mile delivery systems do not go away because customers use less gas. Utilities must continue to maintain underground pipes, respond to service and emergency calls and adhere to federal and state compliance rules.
The utilities will only collect an amount approved by the ICC.When weather is colder than normal and customers use more gas, they will actually receive a credit. When weather is warmer than normal, there will be a charge. The credit or charge will ensure that customers are paying ONLY for delivery service they use and not overpaying or underpaying for that service. The ICC also approved an energy efficiency program to further encourage conservation and provided consumer protections including making the decoupling a four-year pilot and the ability for the ICC to review it at any time.
Here's the bottom line. Customers who reduce energy usage 10 percent will save 10 percent on gas costs and related taxes. Decoupling does not penalize them for doing that. Instead, it allows utilities to encourage conservation and provides the peace of mind that we can focus on ensuring a safe, efficient and reliable gas delivery system at the same time. As those who support decoupling correctly state, no customer will pay for gas they don't use. Period.
President, Peoples Gas and North Shore Gas