Gas Cost Frequently Asked Questions
Q: What is this month’s cost of gas?
A: The cost of gas can vary greatly from month-to-month. Contact our office to find out the latest gas price.
Q: Is Illinois Gas Company setting the price of natural gas?
A: No. Natural gas is a commodity and its price is determined by the market, based on several factors. When Illinois Gas Company buys gas on your behalf and delivers it to your business or home, we charge you exactly what we paid for it – we are not allowed to mark it up, by regulation of the Illinois Commerce Commission.
Q: What is Illinois Gas Company doing to manage fluctuations in natural gas prices?
- Natural gas is a commodity, so prices fluctuate based on several factors. We have taken action to help lessen the impact of market prices by filling our underground storage fields during summer months when gas prices have typically been lower, using financial purchasing instruments and hedging. Taken together, these actions account for about three-quarters of the gas needed for the winter season.
- Illinois Gas Company offers payment programs, such as the budget plan that allows you to spread your payments over a 12-month period.
Factors that Impact Gas Costs
Natural gas is a commodity. And its price goes up and down according to supply and demand across the country. There are several factors that influence supply and demand, such as the economy and weather, and these factors ultimately set the price of gas.
The national factors impacting supply are:
Generally, natural gas production has kept pace with rising demand; however, the national market price of natural gas can increase, sometimes greatly, as a result of short-term supply disruptions.
Storage levels of natural gas on a national level have a dramatic impact on gas costs. Colder than normal weather, particularly early in the heating season, could cause storage levels to be drawn down at an accelerated pace this winter, further impacting prices.
The national factors impacting demand are:
Weather has the strongest impact on gas prices and is also the most difficult to predict. Not only do weather conditions in the Midwest impact natural gas prices, but so does weather throughout the country, particularly the eastern U.S. where there is large potential for natural gas consumption.
Economic factors can cause some industries to lose business to foreign competitors, impacting U.S. industrial production. Decreased industrial demand for natural gas could have a moderating effect on gas prices.