Decoding Your Natural Gas Bill in Illinois: What Every Charge Means

Supply vs. Delivery: The Two Core Components of Your Illinois Gas Bill

Just like electricity, natural gas in Illinois operates in a deregulated market where the commodity (gas supply) is separate from the transportation (delivery). This dual structure is fundamental to understanding your bill and identifying where you can save money.

Understanding Gas Supply Charges

Gas supply charges represent the actual cost of the natural gas your business consumes. This is the portion of your bill where you have choice and can shop for competitive rates from alternative gas suppliers (AGS). Supply charges are typically measured in therms or CCF (hundred cubic feet) and include:

Gas Commodity Cost: The price per therm for the natural gas itself, often tied to NYMEX natural gas futures or spot market prices
Storage and Balancing: Costs associated with storing gas and managing supply/demand imbalances
Pipeline Transportation: Interstate pipeline charges to bring gas into Illinois
Supplier Margin: The competitive supplier's markup for providing service

According to the U.S. Energy Information Administration, natural gas prices in Illinois can vary significantly throughout the year, with winter months typically seeing higher costs due to heating demand.

Understanding Delivery Charges

Delivery charges are regulated by the Illinois Commerce Commission and cover the cost of transporting natural gas through the local distribution network to your business. Unlike supply charges, these are non-negotiable regardless of which supplier you choose:

Customer Charge: A fixed monthly fee for maintaining your connection to the gas system
Distribution Charge: Costs for maintaining pipes, valves, regulators, and other infrastructure
System Infrastructure: Investments in system upgrades and safety improvements
Metering: Costs for reading and maintaining your gas meter

Why Understanding This Matters for Commercial Customers

For commercial customers in Illinois, gas bills can represent a significant operating expense, especially for businesses with heating needs, manufacturing processes, or food service operations. The supply portion typically accounts for 50-70% of your total gas bill, making it the primary target for cost reduction strategies.

The good news is that since Illinois deregulated its natural gas market in 2002, commercial customers have been able to choose their gas supplier. This means you can:

Lock in fixed rates to protect against price volatility
Negotiate contract terms that match your business needs
Work with suppliers who understand commercial operations
Bundle multiple locations for volume discounts

A Line-by-Line Breakdown: From 'Customer Charge' to 'Therms Used'

Let's examine each line item you might encounter on your Illinois commercial gas bill. Understanding these charges helps you verify accuracy and identify unusual variations.

Account Information Section

Before the charges begin, your bill includes essential account details:

Account Number: Your unique identifier with the utility
Service Address: The location receiving gas service
Meter Number: The specific meter tracking your usage
Rate Schedule: The tariff governing your charges (commercial rates differ from residential)
Billing Period: The dates covered by this bill

Usage Summary

Your bill summarizes consumption in standardized units:

Therms Used

A therm is a unit of heat energy equal to 100,000 BTUs. This is the standard billing unit for natural gas in Illinois. Your bill may also show CCF (hundred cubic feet), which is converted to therms based on the heat content of the gas delivered.

Meter Readings

Previous and current meter readings are shown, along with the multiplier used to calculate actual consumption. Commercial meters often have multipliers greater than 1.

BTU Factor

The heat content of natural gas varies slightly. Your utility measures this and applies a BTU factor to convert volume to therms accurately.

Nicor Gas Bill Breakdown

Nicor Gas serves over 2 million customers in northern Illinois. Here's what commercial customers typically see:

Customer Charge

A flat monthly fee ranging from approximately $30 to over $200 for commercial accounts, depending on your rate class and meter size. This covers administrative and fixed infrastructure costs.

Distribution Charge

Calculated per therm, this charge covers the cost of local distribution infrastructure. Commercial rates vary by service class and consumption level.

Gas Supply Charge

If you're on Nicor's default supply, this reflects their cost of purchasing gas. If you've chosen an alternative supplier, this section shows your supplier's charges instead.

Environmental Recovery Adjustment

Recovers costs for environmental remediation at former manufactured gas plant sites and ongoing environmental compliance.

Peoples Gas and North Shore Gas Bill Breakdown

Peoples Gas serves Chicago, while North Shore Gas serves the northern Chicago suburbs. Both are WEC Energy Group utilities with similar billing structures:

Customer Charge

Fixed monthly charge based on rate classification. Commercial customers typically pay between $40 and $300 monthly depending on account size.

Distribution Service Charge

Per-therm charge for using the distribution system. May include tiered rates where the per-therm cost decreases as usage increases.

Gas Charge

The commodity cost for customers on default supply. This rate changes monthly based on wholesale market conditions.

Qualifying Infrastructure Plant Surcharge

Recovers costs for accelerated infrastructure replacement programs approved by the ICC to improve safety and reliability.

Ameren Illinois Gas Bill Breakdown

Ameren Illinois serves customers in central and southern Illinois with both electricity and natural gas:

Customer Charge

Monthly fixed charge covering basic service costs. Commercial rates vary by account type.

Delivery Charge

Per-therm distribution charge covering local pipeline maintenance and operation.

Purchased Gas Adjustment

Adjusts the gas commodity rate based on actual versus estimated wholesale costs.

Gas Supply Cost

The current per-therm rate for gas commodity if using Ameren's default supply service.

Uncovering Added Costs: A Plain-English Guide to Illinois Gas Taxes, Riders & Fees

Beyond the basic supply and delivery charges, your Illinois gas bill includes various taxes, riders, and fees. These can add 10-20% to your total bill, so understanding them is essential.

State and Local Taxes

Illinois imposes multiple taxes on natural gas:

Illinois Gas Revenue Tax

A state tax based on a percentage of your gas bill. The rate varies by customer class and can be a significant line item for commercial users.

Gas Use Tax

Imposed by the state on the privilege of using gas in Illinois. Applied per therm consumed.

Municipal Utility Tax

Many Illinois municipalities levy their own utility taxes. Rates vary widely by location, from 0% to over 5% in some communities.

Franchise Fee

Payments utilities make to municipalities for the right to use public rights-of-way, passed through to customers.

Understanding Riders and Adjustments

Riders are adjustable rate components that change periodically based on specific costs or programs:

Energy Efficiency Rider

Funds utility energy efficiency programs mandated by Illinois law. These programs offer rebates and incentives that can offset this cost.

Uncollectible Expense Rider

Recovers costs from unpaid customer bills. This socializes bad debt across paying customers.

Weather Normalization Adjustment

Some utilities apply adjustments to stabilize revenue regardless of weather conditions.

Infrastructure Investment Rider

Recovers accelerated capital investments in pipeline safety and modernization.

Purchased Gas Adjustment (PGA)

The PGA is a critical component that deserves special attention. This adjustment mechanism allows utilities to pass through the actual cost of purchasing gas from suppliers. Key points:

The PGA can fluctuate monthly based on wholesale market conditions
It's designed to be revenue-neutral for the utility, recovering only actual costs
During winter months or supply disruptions, PGA can spike significantly
The ICC reviews PGA charges to ensure reasonableness

Late Payment Charges

Illinois utilities charge late fees on unpaid balances. For commercial accounts, this is typically 1.5% per month on the overdue amount. Maintaining timely payments prevents these unnecessary costs.

From Confusion to Control: Actionable Strategies to Lower Your Commercial Gas Costs

Now that you understand every line item on your bill, let's focus on practical strategies to reduce your Illinois commercial natural gas costs. These approaches range from quick wins to long-term strategic initiatives.

Strategy 1: Shop for a Competitive Gas Supplier

Since Illinois deregulated its natural gas market, commercial customers can choose their gas supplier. This is your single biggest opportunity for savings:

Fixed-Rate Contracts: Lock in your gas supply rate for 12, 24, or 36 months to eliminate price volatility and simplify budgeting
Index Pricing: Pay rates tied to NYMEX futures for potential savings when markets are favorable
Hybrid Structures: Fix a base volume while letting additional usage float with the market
Volume Commitments: Larger usage volumes often qualify for better rates

According to data from the Citizens Utility Board, Illinois consumers have saved millions by switching to competitive suppliers. Commercial savings can be even greater due to larger volumes and negotiating leverage.

Strategy 2: Optimize Your Usage Patterns

Beyond shopping for better rates, operational improvements can reduce consumption:

Conduct an Energy Audit

Identify inefficiencies in your heating systems, processes, and building envelope. Many utilities offer free or subsidized audits for commercial customers.

Upgrade to High-Efficiency Equipment

Modern condensing boilers, furnaces, and water heaters can achieve 95%+ efficiency compared to 80% or less for older equipment. Utility rebates often offset upgrade costs.

Implement Smart Controls

Programmable thermostats and building automation systems ensure you're not heating spaces unnecessarily during unoccupied hours.

Maintain Equipment Regularly

Annual boiler tune-ups, combustion analysis, and heat exchanger cleaning maintain peak efficiency and extend equipment life.

Strategy 3: Take Advantage of Utility Programs

Illinois utilities offer numerous programs for commercial customers:

Energy Efficiency Rebates: Cash back for installing high-efficiency equipment
Custom Incentives: For large projects, utilities offer engineering support and custom rebate calculations
Demand Response Programs: Some utilities offer incentives for reducing gas usage during peak periods
Technical Assistance: Free engineering assessments and recommendations

Strategy 4: Review Your Rate Classification

Commercial gas customers may qualify for different rate schedules based on usage characteristics:

Seasonal Rates: If your usage is heavily weather-dependent, seasonal rate structures may be advantageous
Interruptible Service: If you can reduce gas usage during supply emergencies, interruptible rates offer significant discounts
Transportation-Only Service: Large users may qualify for transportation-only service, purchasing gas directly from marketers

Strategy 5: Aggregate Multiple Locations

If your business operates multiple facilities in Illinois, aggregating your gas purchasing can yield better rates:

Combined volumes increase negotiating leverage with suppliers
Simplified administration with one contract and one renewal date
Portfolio approach can balance usage variations across locations
Better visibility into total energy spend

Ready to Lower Your Commercial Gas Costs?

Getting competitive quotes is the first step toward significant savings on your Illinois commercial natural gas bill. Our partner network includes licensed alternative gas suppliers serving businesses throughout Illinois.

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Frequently Asked Questions About Illinois Commercial Gas Bills

Conclusion: Take Control of Your Illinois Commercial Gas Bill

Understanding your Illinois commercial natural gas bill empowers you to make informed decisions about your energy costs. By distinguishing between supply and delivery charges, you can focus your efforts on areas where you have control and potentially save thousands of dollars annually.

Remember these key takeaways:

Supply charges are competitive and represent your greatest savings opportunity
Delivery charges are regulated but understanding them ensures bill accuracy
Taxes, riders, and fees can add 10-20% to your bill
Energy efficiency investments reduce consumption and may qualify for utility rebates
Working with energy advisors can streamline the supplier selection process

Whether your business operates in Chicago, Aurora, Springfield, or anywhere else in Illinois, the principles outlined in this guide apply. Take the first step today by gathering your usage data and exploring your options for a more competitive natural gas supply rate.