Here’s Why Your Heating Bill Has Been So High (It’s Not Just The Cold)
Don't Miss This
Get Breaking News First
CHICAGO (CBS) – Has your Peoples Gas heating bill gone way up the last few months? Especially compared to last year?
There’s a reason for that. Actually, there are many reasons and not all of them have to do with the terrible cold that’s caught Chicago in a mercilessly frigid headlock.
Chicago’s main natural gas provider, Peoples Gas, projected last year that this winter’s gas prices would be up. As reported by Crain’s, Peoples Gas estimated the average cost to heat a home from November 2013 through March 2014 would total about $800, a 13% rise from last year’s five-month total of $710.
Part of this difference comes from a $56 million delivery rate hike the Illinois Commerce Commission granted Peoples Gas back in June 2013. Usually, the cost of delivering gas (and not the gas itself) counts for about a third of the typical heating bill, but could be more. As Crain’s points out in their article, the rest of the bill is is the cost of the gas, which customers get at cost.
So it costs more for Peoples Gas to deliver the natural gas to you, but has the gas price itself risen?
In December 2012, the price per therm of gas was $00.3765. Remember, Peoples Gas gives you this at cost, what they pay for it is what you pay.
Cost per therm in December 2013? $00.4437; a rise of seven cents. For January 2013, the price per therm was $00.4110, and for January 2014, it was $00.4773. February of 2013, it was $00.4097, this month it’s $00.5183!
So what can cause an increase of over 10 cents?
Though natural gas has been relatively low in price in recent years, it was predicted last year that gas prices would rise about 11% thanks to a lower amount in storage and an increase in demand.
Thanks to the extreme cold, the rise was even worse than predicted. Natural gas prices rose above $5 per million British thermal units (a therm equals 100,000 BTUs) at one point last month, making it the highest price since June 2010 — the average for the month was $4.71. According to the U.S. Energy Information Administration, that was a $0.47 increase from December.
Basically, natural gas prices were expected to be higher this year with the assumption that we’d have a relatively normal winter. Record-breaking lows have taken prices that were expected to be higher, and made them even worse.
Another factor to consider when it comes to heat is your water heater. Cold temperatures haven’t only made it more difficult to heat your apartment, but also more difficult to heat the water coming out of your faucets, which is yet another factor making your heat bill rise.
It’s also likely you’ve stayed in more this winter. The more you stay in, the longer you keep the thermostat up, the more natural gas you use.
There is good news though: the weather is supposed to warm up next week! Temperatures are supposed to rise above freezing with the possibility of hitting 40 degrees.
Time to bust out the shorts!