Understanding Your Commercial Natural Gas Bill in Illinois: A Detailed Guide

For Illinois businesses, natural gas represents a substantial operating expense—particularly during winter months when heating loads drive consumption to annual peaks. Yet most business owners struggle to fully understand their commercial natural gas bills, leaving money on the table through overpayments, billing errors, unfavorable supplier contracts, and missed optimization opportunities.

This comprehensive guide decodes every component of Illinois commercial natural gas bills, explains the critical distinction between supply and delivery charges, identifies the three most common costly billing errors, and provides a step-by-step process for comparing suppliers and locking in lower rates. Whether your annual gas costs are $5,000 or $500,000, understanding these billing dynamics can reduce expenses by 10-25% while improving budget predictability.

Natural gas billing complexity stems from Illinois' deregulated market structure, multiple charge categories, seasonal variations, and confusing terminology. This guide eliminates that confusion, empowering you to take control of one of your largest variable operating expenses.

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Sources:

• U.S. Department of Energy
• ENERGY STAR
• American Council for an Energy-Efficient Economy

Why Is Your Illinois Commercial Gas Bill So High? Decoding Every Line Item

Illinois commercial natural gas bills contain 15-30 individual line items across multiple categories. Understanding each component is essential for identifying optimization opportunities and spotting errors.

The Anatomy of an Illinois Commercial Gas Bill

Let's dissect a typical commercial gas bill to understand every charge:

Account Information Section:

• Account number and service address
• Billing period dates (typically monthly)
• Current and previous meter readings
• Actual vs. estimated reading indicator
• Total usage in therms or CCF (hundred cubic feet)

Usage Summary: Natural gas usage appears in multiple units, which creates confusion:

• Therms: Most common billing unit; 1 therm = 100,000 BTUs of energy
• CCF (Hundred Cubic Feet): Volume-based measurement; approximately 1 CCF = 1.02-1.03 therms depending on gas quality
• MCF (Thousand Cubic Feet): Used for larger customers; 1 MCF = 10 CCF ≈ 10 therms
• Dekatherms (Dth): Wholesale market unit; 1 Dth = 10 therms = 1 MMBtu

Most Illinois utilities bill in therms for small commercial customers and Dth for large customers.

Supply Charges (if you've selected an alternative supplier):

• Commodity charge: $X.XX per therm
• May include separate line items for capacity, balancing, or other supplier-specific charges
• Shows supplier name and contact information

Delivery Charges (from local utility):

• Distribution charge: Base cost for local pipeline infrastructure
• Customer charge: Fixed monthly charge regardless of usage
• System improvement charge: Infrastructure upgrade costs
• Gross receipts tax surcharge: Passes through utility tax obligations
• Environmental cost recovery: Costs for environmental compliance
• Bad debt recovery: Costs from non-paying customers distributed across paying customers
• Demand charge: For customers with high peak-day usage (less common for gas than electricity)

Regulatory and Tax Charges:

• State and local taxes (varies by jurisdiction, typically 5-11% total)
• Municipal franchise fees
• Federal and state environmental fees
• Illinois Utility Tax
• Home Energy Assistance Program (HEAP) surcharge

Why Bills Fluctuate Dramatically

Commercial gas bills vary significantly month-to-month and year-to-year:

Seasonal Consumption Patterns: Illinois heating degree days (HDDs) drive natural gas consumption. HDDs measure how much and how long temperatures fall below 65°F:

• January average HDDs: 1,200-1,400 (Chicago), 1,100-1,300 (downstate)
• July average HDDs: 0-5
• This 200-300x variation in heating requirements directly drives consumption

A business using 2,000 therms monthly in January might use only 100-200 therms in July (mainly for water heating and process loads). With rates around $0.80-1.20 per therm, this creates billing variations from $2,000 in summer to $20,000+ in winter for even modest commercial facilities.

Commodity Price Volatility: Natural gas is a globally traded commodity with prices driven by:

• Seasonal demand (winter heating, summer power generation)
• Weather forecasts (extreme cold forecasts spike prices)
• Supply disruptions (pipeline outages, production changes)
• Competition with other fuels (coal, oil, renewables)
• International LNG markets
• Storage inventory levels

Recent price history illustrates volatility:

• 2020: $1.50-3.50/MMBtu (pandemic demand collapse)
• 2021: $3.00-6.50/MMBtu (economic recovery)
• 2022: $4.00-9.00/MMBtu (global supply disruptions, Ukraine conflict)
• 2023-2024: $2.00-4.00/MMBtu (supply increases, mild weather)
• 2025-2026: $3.00-5.00/MMBtu projected

This wholesale price volatility directly affects your supply charges, creating billing uncertainty.

Rate Structure Changes: Illinois utilities periodically adjust delivery charges through rate cases approved by the Illinois Commerce Commission. These changes typically occur every 2-4 years and can increase bills by 5-15% independent of consumption changes.

Billing Estimate vs. Actual Reads: Utilities estimate bills when unable to access meters, then correct with actual readings on subsequent bills. This creates artificial month-to-month variations:

Example:

• Month 1: Estimated 1,500 therms, billed $1,500
• Month 2: Actual reading shows combined usage was 3,500 therms
• Month 2 bill: 2,000 therms (true-up from Month 1) = $2,000

This appears as usage spike but is merely correction of previous estimate.

Breaking Down Typical Cost Components

For an average Illinois commercial customer using 10,000 therms annually, here's how costs typically distribute:

Component	Annual Cost	% of Total	Control
Gas Commodity (Supply)	$4,000-7,000	45-55%	Can shop suppliers
Distribution/Delivery	$3,500-4,500	35-40%	Set by utility, cannot shop
Customer Charges	$240-360	2-3%	Set by utility
Taxes and Fees	$800-1,200	8-12%	Regulated, cannot control
TOTAL	$8,540-13,060	100%

The commodity supply portion—representing nearly half of your costs—is where you have direct control through supplier selection and contract negotiation.

Understanding Your Rate Schedule

Illinois utilities offer multiple rate schedules based on business size and usage profile:

Small Commercial (SC): Typically under 3,000-5,000 therms annually

• Simple volumetric rates ($/therm)
• Higher per-unit costs
• No demand charges
• May bundle supply with delivery

General Service or Commercial (GS/GC): 5,000-100,000 therms annually

• Volumetric rates with possible declining blocks
• Choice of suppliers available
• Customer charges based on meter size
• Temperature-adjusted rates in some territories

Large Commercial/Industrial: 100,000+ therms annually

• Customized rate structures
• May include demand charges based on peak-day usage
• Firm vs. interruptible service options
• Direct access to transportation services
• Potential for special contract rates

Critical Question: Are you on the optimal rate schedule? Many businesses remain on small commercial rates despite growing into larger usage categories. Switching rate schedules can save 10-20% immediately. Contact your utility to request a rate analysis showing potential savings from switching schedules.

Usage Intensity Benchmarking

Understanding whether your usage is reasonable requires comparison to similar facilities:

Typical Commercial Gas Intensity (annual therms per square foot):

• Office buildings: 0.2-0.4 therms/sq ft
• Retail: 0.3-0.6 therms/sq ft
• Restaurants: 1.5-3.5 therms/sq ft (cooking loads)
• Warehouses: 0.15-0.35 therms/sq ft
• Manufacturing: 1.0-10+ therms/sq ft (highly variable by process)
• Healthcare: 0.8-1.5 therms/sq ft
• Schools: 0.4-0.7 therms/sq ft

If your intensity significantly exceeds these benchmarks, you likely have efficiency opportunities through equipment upgrades, building envelope improvements, or operational changes. Even a 20% reduction in a business using 10,000 therms annually saves $1,600-2,000 annually.

Supply vs. Delivery Charges: What You're Actually Paying For in Illinois

The distinction between supply and delivery charges is fundamental to understanding and optimizing your natural gas costs.

The Illinois Natural Gas Market Structure

Illinois' deregulated natural gas market separates commodity supply from delivery infrastructure:

Supply (Commodity): The actual natural gas molecules you burn in your boiler, furnace, or equipment. Supply involves:

• Purchasing gas at production points (Gulf Coast, Marcellus/Utica shale, Midcontinent)
• Transporting gas via interstate pipelines to Illinois
• Managing storage for seasonal supply balancing
• Trading and risk management for price stability
• Customer service and billing

In Illinois' competitive market, you can choose among multiple retail energy suppliers offering different pricing structures, contract terms, and service features. Major Illinois gas suppliers include Constellation Energy, Direct Energy, IGS Energy, Inspire Energy, Liberty Power, and dozens of others.

Delivery (Distribution): The local pipeline network delivering gas from interstate pipeline connection points to your facility. Delivery involves:

• Local distribution pipeline network
• Pressure regulation and measurement
• Emergency response and public safety
• Meter reading and maintenance
• System upgrades and expansion
• Regulatory compliance

Delivery service is a regulated monopoly—you must use the utility serving your geographic location and cannot shop for delivery service. Your delivery provider is one of:

• Nicor Gas: Serving northern Illinois outside Chicago
• Peoples Gas: Serving Chicago
• North Shore Gas: Serving northern suburbs
• Ameren Illinois: Serving central and southern Illinois

Supply Charges Explained

Supply charges compensate your gas supplier for procuring and delivering gas to your local utility's system. Typical structures include:

Fixed-Rate Supply:

• Simple pricing: $X.XX per therm for contract duration
• Price certainty and budget stability
• Typical terms: 1-3 years (12-36 months)
• Rate locks in current market prices, providing upside and downside protection
• Example: $0.45/therm fixed for 24 months

Advantage: Certainty and simplicity. You know exactly what supply will cost, enabling accurate budgeting. Disadvantage: If market prices fall significantly, you're locked into higher rates.

Index/Variable Rate Supply:

• Pricing tied to published natural gas index (typically NYMEX or Chicago Citygate)
• Structure: Index Price + Fixed Adder
• Example: "NYMEX + $0.08/therm" means you pay the current month's NYMEX natural gas price plus 8 cents
• Typical adders: $0.05-0.15/therm depending on creditworthiness and volume

Advantage: Benefit when market prices fall. More flexibility (typically month-to-month or with shorter terms). Disadvantage: Exposure to price spikes during extreme cold or market disruptions. Budget uncertainty.

Hybrid/Structured Products:

• Combination of fixed and index components
• Example: "60% fixed at $0.48/therm, 40% index at NYMEX + $0.07"
• Provides partial price protection while retaining some market exposure
• Collars (floors and caps) limiting price ranges

Advantage: Balances certainty with flexibility. Disadvantage: More complex, harder to compare across suppliers.

Block and Index:

• Fixed price for base usage block, index pricing for excess usage
• Example: "First 5,000 therms/month at $0.46, additional usage at NYMEX + $0.09"
• Common for customers with consistent base load and variable peak usage

What's Included in Supply Charges?

Your supply rate includes multiple cost components bundled into the single per-therm charge:

1. Commodity cost: Actual wholesale natural gas price
2. Interstate pipeline capacity: Reserved capacity on major pipelines bringing gas to Illinois
3. Storage services: Injecting gas into storage during summer, withdrawing during winter
4. Balancing services: Managing daily/monthly usage variations
5. Supplier margin and overhead: Profit and operating costs for retail supplier
6. Risk premium: Cost of hedging and managing price/supply risk

Suppliers with lower overhead, better pipeline contracts, or willingness to accept lower margins can offer better rates. This is why shopping multiple suppliers typically finds 5-20% savings opportunities.

Delivery Charges Explained

Delivery charges are tariffed rates set by your local utility and approved by the Illinois Commerce Commission. These charges recover costs for maintaining and operating local distribution infrastructure:

Distribution Charge (largest component):

• Volumetric charge ($/therm) covering local pipeline operations
• Varies by rate schedule and usage tier
• Typical range: $0.15-0.40/therm depending on utility and customer class
• May include declining block structures (lower rates at higher volumes)

Customer Charge:

• Fixed monthly charge regardless of usage
• Covers meter reading, billing, customer service
• Based on meter size (larger meters = higher charge)
• Typical range: $15-40/month for small commercial, $50-300/month for large commercial

Infrastructure and System Improvement Charges:

• Recover costs for pipeline replacements, safety upgrades, system modernization
• Illinois utilities are replacing aging cast iron and bare steel pipelines
• These surcharges change periodically as programs progress
• Typical impact: $0.02-0.08/therm

Transportation Charges (large customers only):

• For customers purchasing gas directly from interstate pipelines or suppliers
• Covers distribution from utility gate station to customer meter
• Typically lower rates but requires sophisticated gas management

Regulatory and Compliance Charges:

• Environmental remediation costs
• Regulatory compliance expenses
• Energy efficiency program funding
• Bad debt recovery
• Varies by utility: $0.01-0.05/therm total

Supply vs. Delivery: Real Numbers Example

For a business using 1,000 therms in January:

Supply Charges (controllable):

• Commodity: 1,000 therms × $0.48/therm = $480
• (You shopped and selected this supplier/rate)

Delivery Charges (not controllable):

• Distribution: 1,000 therms × $0.28/therm = $280
• Customer charge: $25/month = $25
• Infrastructure surcharge: 1,000 × $0.04/therm = $40
• Delivery subtotal: $345

Taxes and Fees:

• State/local taxes (9%): ($480 + $345) × 0.09 = $74
• Utility tax: $15
• Tax subtotal: $89

Total Bill: $480 + $345 + $89 = $914

In this example:

• Supply = 52.5% (you control this)
• Delivery = 37.7% (utility-regulated)
• Taxes = 9.8% (government-mandated)

By shopping supply effectively, you can reduce the $480 supply charge by $50-100 (10-20%), reducing your total bill by 5-11%.

Why Understanding This Distinction Matters

Many businesses focus only on the per-therm rate quoted by suppliers without understanding that delivery charges add substantially to total costs:

Misleading Supplier Marketing: Supplier markets with headlines like "Natural Gas at $0.399/therm!" but fails to mention that delivery, taxes, and fees will add another $0.35-0.50/therm to your actual cost. Always evaluate total cost including delivery when comparing options.

Utility Supply vs. Alternative Supplier: Your utility offers default supply service. Alternative suppliers sometimes (but not always) beat utility pricing. You must compare the total supply cost:

• Utility supply rate (check bill or utility website)
• Alternative supplier proposed rate
• Any additional fees (cancellation, monthly fees, etc.)

Savings must be meaningful (at least 5-8%) to justify switching given the hassle and potential risks.

Finding Savings: 3 Costly Errors to Spot on Your Illinois Gas Bill Today

Utility billing errors are more common than most businesses realize. Studies suggest 10-15% of commercial utility bills contain errors or optimization opportunities worth investigating.

Error #1: Incorrect Meter Readings and Billing Adjustments

The Issue: Utilities estimate bills when unable to obtain actual meter readings, then adjust future bills when actual readings occur. However, estimation algorithms sometimes fail, and corrections may not occur properly.

How to Identify:

• Look for "Estimated" vs. "Actual" indicators on your bill
• Track consecutive months of estimates (3+ months suggests potential issues)
• Calculate daily usage (divide monthly usage by billing period days) and look for dramatic spikes or drops that don't correlate with weather or operations
• Compare current year usage to same month prior year (adjusted for weather variations)

Red Flags:

• Usage suddenly doubles or halves without explanation
• Multiple consecutive estimated bills
• Summer usage exceeding winter usage (unusual unless you have process loads)
• Billing adjustments that seem excessive

Real Example: A Chicago restaurant's gas bills:

• October: 450 therms (actual)
• November: 425 therms (estimated)
• December: 820 therms (estimated)
• January: 2,400 therms (actual, includes corrections)

Investigation revealed the meter reader couldn't access the meter in November and December. January's actual read showed total Nov-Dec-Jan usage was 3,200 therms, not the 3,645 billed (820 + 2,400 in Dec/Jan). The business was overcharged for 445 therms ($400-500).

Resolution Steps:

1. Request utility provide actual meter reading history
2. Compare billed usage to actual meter changes
3. If discrepancies exist, file billing dispute with utility
4. Request credits for any overcharges
5. Ensure meter is accessible to prevent future estimates
6. Consider automated meter reading (AMR) if repeatedly estimated

Prevention:

• Ensure meter is easily accessible
• Take your own meter readings monthly and compare to bills
• Request actual readings if estimated more than 2 consecutive months
• Ask about AMR/AMI (automated) meter installation

Error #2: Wrong Rate Classification or Missed Savings Programs

The Issue: Utilities place customers on rate schedules based on initial service setup, but businesses grow, usage patterns change, and better rate options become available. Many businesses remain on suboptimal rates for years simply because they're unaware alternatives exist.

How to Identify:

• Review your bill's rate schedule designation (usually on first page)
• Call utility and ask: "Am I on the optimal rate schedule for my usage profile? What other rate schedules am I eligible for, and what would my recent bills have cost on those schedules?"
• Compare your usage levels to rate schedule thresholds in utility tariff books (available on utility websites or by request)

Common Misclassification Scenarios:

Scenario 1: Still on Small Commercial Despite Higher Usage

• You started as small business on SC rate
• Usage grew past threshold for general service rate (often 3,000-5,000 therms annually)
• SC rates are $0.05-0.15/therm higher than GS rates
• Potential savings: $500-1,500 annually

Scenario 2: Eligible for Discounted Large Volume Rates

• Your annual usage exceeds threshold for large customer rates (often 100,000+ therms)
• Large customer rates may include declining block structures
• May also qualify for transportation services (buying your own gas)
• Potential savings: $5,000-25,000 annually for very large users

Scenario 3: Not Taking Advantage of Interruptible Rates

• If your business can use alternative fuels or curtail usage on peak days
• Interruptible rates are 20-40% lower but require accepting service interruptions (typically 5-10 days annually)
• Best for facilities with dual-fuel capability or flexible operations
• Potential savings: $3,000-15,000 annually depending on size

Real Example: A 45,000 sq ft warehouse in suburban Chicago heated with gas using approximately 8,000 therms annually. They were on the small commercial rate (SC-1) since opening 8 years earlier. Utility analysis revealed:

• Current rate: Average $0.92/therm all-in
• General Service rate: Average $0.79/therm all-in
• Savings: $0.13/therm × 8,000 = $1,040 annually
• Simply switching rate schedules (no usage reduction) saved over $1,000 per year

Resolution Steps:

1. Request rate analysis from your utility (many utilities provide this free)
2. Review usage over past 12-24 months to verify you meet eligibility for alternative rates
3. Complete rate schedule change request (utility provides forms)
4. Verify change on subsequent bill

Prevention:

• Review rate schedule annually
• Whenever usage patterns change significantly, request rate analysis
• After business expansions, renovations, or operational changes, reassess rate schedule

Error #3: Unauthorized Supplier Changes or Contract Auto-Renewals

The Issue: Illinois' competitive natural gas market allows businesses to choose suppliers, but this creates opportunities for misleading marketing, unauthorized enrollment, and expensive contract auto-renewals.

How to Identify:

• Check your bill's supply charges section for supplier name
• If supplier changed unexpectedly, this may be unauthorized
• Review any supply agreements you signed for auto-renewal provisions
• Compare current supply rate to market rates (check Energy Information Administration for current market pricing)

Common Problems:

Unauthorized Supplier Switches (Slamming):

• You receive misleading marketing ("mandatory energy review")
• Sign what you think is informational form, actually authorizing supplier switch
• New supplier charges higher rates than previous arrangement
• Illegal but still occurs

Warning signs:

• Supplier change you didn't explicitly authorize
• Supply rate much higher than previous supplier
• No memory of agreeing to switch

Expensive Auto-Renewals: Many supplier contracts include auto-renewal provisions:

• Original contract: $0.46/therm for 24 months
• Auto-renewal rate: $0.68/therm for 12 months (often much higher)
• Contract specifies you must cancel 30-60 days before expiration to avoid auto-renewal
• You miss deadline, locked into inflated rates

Warning signs:

• Supply rate suddenly increases significantly
• Contract renewed automatically
• Rate now above current market

Embedded Fees: Some suppliers include monthly fees not clearly disclosed:

• Administration fee: $9.95/month
• Customer service fee: $5.00/month
• These fees add $180-240 annually to costs

Real Example: A Rockford manufacturing business signed a 24-month fixed-rate supply agreement at $0.44/therm in 2023. In 2025, owner noticed bills increased significantly. Investigation revealed:

• Original contract expired December 2024
• Auto-renewed at $0.72/therm for 12 months
• Current market rates: $0.38-0.45/therm
• Contract required 60-day cancellation notice
• Business now locked into $0.72 rate vs. $0.42 market rate
• Excess cost: $0.30/therm × 25,000 annual therms = $7,500 for the year

Resolution Steps:

1. If unauthorized switch: Contact utility immediately to report unauthorized supplier change, file complaint with ICC (Illinois Commerce Commission), switch back to previous supplier or utility supply
2. If expensive auto-renewal: Review contract terms carefully, determine cancellation notice period and fees, compare termination cost vs. continuing inflated rates, often better to pay termination fee if savings justify it
3. Check for cancellation deadlines on current contract
4. Set calendar reminders 90 days before contract expiration

Prevention:

• Never sign documents from door-to-door or telephone marketers without thorough review
• Review all supplier contracts personally or have attorney review
• Understand auto-renewal terms and cancellation requirements
• Set calendar alerts for contract expiration dates
• Shop rates proactively 90-120 days before contract expiration
• Consider shorter contracts (12 months) for more flexibility

Take Control: How to Compare Suppliers & Lock in Lower Natural Gas Rates in Illinois

Shopping for natural gas supply shouldn't be complicated, but it requires systematic approach to ensure you're comparing true alternatives and avoiding traps.

Step 1: Gather Your Information

Before requesting quotes, assemble essential information:

Usage Data:

• 12-24 months of billing history
• Monthly usage in therms
• Identify seasonal patterns (lowest usage months vs. highest)
• Calculate annual usage
• Note any significant usage changes planned (expansions, new equipment, etc.)

Account Details:

• Utility name (Nicor, Peoples Gas, North Shore Gas, Ameren Illinois)
• Account number
• Rate schedule
• Meter number
• Service address

Current Supply:

• Current supplier (if applicable)
• Current rate and contract terms
• Contract expiration date
• Any early termination fees

Step 2: Understand Your Options

Illinois businesses have multiple supply procurement options:

Option 1: Utility Default Supply

• Continue taking supply from your local utility
• Simple, no contract required
• Rates adjust periodically (typically quarterly or monthly)
• No risk of supplier bankruptcy or contract disputes
• Often competitive with retail suppliers
• Rates published on utility websites

Pros: Simplicity, stability, no contracts Cons: No rate lock, no customized terms

Option 2: Fixed-Rate Retail Supply

• Contract with alternative supplier for fixed rate
• Typical terms: 12-36 months
• Rate certainty and budget stability
• Protection against market price increases

Pros: Price certainty, easy budgeting Cons: Miss savings if prices fall, contract obligations

Option 3: Index/Variable Rate Retail Supply

• Rate adjusts monthly based on market index
• Benefit when prices fall
• More flexibility (shorter or no contract terms)

Pros: Flexibility, potential savings in falling market Cons: Budget uncertainty, exposure to spikes

Option 4: Block and Index (Hybrid)

• Partial fixed price, partial market exposure
• Balance of certainty and flexibility

Option 5: Group Buying/Municipal Aggregation

• Some Illinois municipalities aggregate commercial customers for group purchasing
• Leverages collective volume for better rates
• Check with your municipality for available programs

Step 3: Request Quotes from Multiple Suppliers

Where to Find Suppliers:

• Illinois Commerce Commission supplier list
• Online energy brokers and marketplaces
• Direct contact with major suppliers
• Energy brokers and consultants

Request Quotes from at Least 3-5 Suppliers

Provide each supplier with:

• Your annual usage volume
• Desired contract length
• Preferred rate structure (fixed vs. index)
• Quote request deadline

What to Request:

• Total supply rate ($/therm, all-in)
• Breakdown of any additional fees
• Contract term and start date
• Early termination fees
• Auto-renewal terms
• Cancellation requirements

Step 4: Compare Quotes Apples-to-Apples

Create comparison spreadsheet with:

Supplier	Rate ($/therm)	Monthly Fees	Contract Term	Early Term Fee	Auto-Renewal	Total Annual Cost*
Utility Default	$0.52	$0	None	N/A	N/A	$5,200
Supplier A	$0.46	$9.95/mo	24 months	$500	Yes, $0.63	$4,719
Supplier B	$0.48	$0	12 months	$0	No	$4,800
Supplier C	$0.44	$5/mo	36 months	$1,000	Yes, $0.59	$4,460

*Based on 10,000 annual therms

Evaluation Criteria Beyond Price:

1. Total Cost: Don't just compare per-therm rates; include all fees
2. Contract Length: Balance price savings against commitment
3. Supplier Reputation: Check reviews, BBB, ICC complaint records
4. Early Termination Terms: What if you move, close business, or find better rate?
5. Auto-Renewal Terms: Avoid contracts with expensive auto-renewals
6. Customer Service: Check supplier reviews for billing disputes, responsiveness
7. Financial Stability: Verify supplier is financially stable (avoid unknown startups)

Red Flags:

• Rates significantly below all other quotes (too good to be true?)
• High-pressure sales tactics
• Unwillingness to provide written quotes
• Complicated fee structures
• Required long-term contracts for modest savings
• Negative reviews or ICC complaints

Step 5: Negotiate and Finalize Contract

Negotiation Points:

• For larger customers (15,000+ therms annually), rates may be negotiable
• Request removal of monthly fees
• Negotiate termination provisions (lower fees, ability to cancel if moving)
• Remove or modify auto-renewal terms
• Request price protection if rates fall significantly

Before Signing:

• Read entire contract carefully
• Have attorney review if contract value exceeds $10,000
• Understand all terms, fees, and obligations
• Verify math on projected savings
• Confirm start date and expiration date
• Get copies of signed contract

Contract Provisions to Negotiate:

• Force majeure: What happens during extreme market events?
• Assignment: If you sell business, can new owner assume contract?
• Billing disputes: How are disputes resolved?
• Renewal notification: Require supplier notify you 90 days before expiration

Step 6: Monitor and Manage Ongoing

After Signing:

• Confirm switch on first bill under new supplier (takes 1-2 billing cycles)
• Verify rate matches contract
• Check for any unexpected fees
• Monitor usage and costs monthly

Annual Review:

• Set reminder 90 days before contract expiration
• Review market conditions and consider whether to renew
• Shop competitors again
• Reassess whether fixed or index pricing makes sense

Market Timing Considerations: Natural gas prices are seasonal and cyclical:

• Spring/Fall (April-May, September-October): Often best times to lock rates as market prices dip during shoulder seasons
• Summer: Rates often lower due to reduced demand
• Late Fall/Winter: Avoid locking rates during high-demand periods if possible

Track market trends via:

• EIA Natural Gas Weekly Update
• Chicago Citygate prices
• Forward curve analysis (for sophisticated buyers)

Using Energy Brokers

What Brokers Do:

• Aggregate quotes from multiple suppliers
• Provide market analysis and recommendations
• Handle contract negotiations
• May monitor ongoing contracts and alert to renewal needs

Broker Compensation:

• Usually paid by supplier (commission on sales)
• Should be no-cost to customer
• Verify no fees charged to you

Pros: Save time, access multiple suppliers, expertise Cons: May favor suppliers paying higher commissions, conflicts of interest

Vetting Brokers:

• Verify ICC registration
• Check references
• Understand compensation structure
• Get quotes directly from 1-2 suppliers to compare broker recommendations

Advanced Strategies for Large Natural Gas Users

For businesses using 50,000+ therms annually, additional optimization strategies become viable:

Transportation Service

Very large customers (typically 100,000+ therms) can bypass retail suppliers and purchase gas directly from producers or marketers, using the utility only for transportation (delivery):

How it Works:

• You contract directly for gas supply at wholesale markets
• Arrange interstate pipeline transportation to local utility
• Pay utility only for local distribution (transportation rate)
• Manage daily nominations and balancing

Advantages:

• Lower costs (eliminate retail supplier margin)
• Access wholesale market prices
• Flexibility in sourcing

Disadvantages:

• Requires significant expertise
• Daily management responsibilities
• Balancing penalties if usage varies from nominations
• Must manage contracts with multiple parties
• Only economic at very large volumes

Financial Hedging

Large users can hedge natural gas price risk through financial instruments:

• Futures and options contracts
• Swaps and collars
• Requires sophisticated financial management
• Can lock in prices without physical gas contracts

Demand-Side Management

Reducing peak-day usage can significantly cut costs:

• Dual-fuel capability (switch to oil during highest-priced days)
• Process scheduling (run high-gas processes during low-price periods)
• Thermal storage (build up stored heat during off-peak)

Energy Efficiency Investments

Permanent usage reduction provides best long-term savings:

• High-efficiency boilers (90-98% vs. 75-85% for older units)
• Building envelope improvements (insulation, air sealing)
• Heat recovery systems
• Process optimization
• Smart controls

With natural gas at $1.00/therm all-in, a 20% efficiency improvement on 50,000 annual therms saves $10,000/year. Over a 20-year period, that's $200,000 in savings. Equipment upgrades often pay back in 3-7 years.

Illinois utilities offer incentives covering 30-50% of efficiency upgrade costs through programs like ComEd and Ameren business energy efficiency programs.

Common Questions About Illinois Commercial Gas Bills

Q: Can I negotiate my delivery charges with my utility?

A: No. Delivery charges are tariffed rates approved by the Illinois Commerce Commission and apply uniformly to all customers in a rate class. However, you can optimize delivery costs by ensuring you're on the most favorable rate schedule for your usage profile and by reducing overall usage through efficiency measures. Very large customers may qualify for special transportation rates.

Q: What should I do if I suspect a billing error?

A: First, contact your utility's commercial customer service department with specific concerns and documentation (prior bills, meter readings, usage records). Most utilities have dispute resolution processes. If unsatisfied with utility's response, file a complaint with the Illinois Commerce Commission at 1-800-524-0795 or via their website. Keep detailed records of all communications. For billing disputes over $5,000, consider consulting an energy attorney.

Q: How often should I shop for gas supply?

A: Review supply options 90-120 days before your current contract expires. Also shop if: you're currently on utility default supply and haven't shopped in over a year, your contract auto-renewed at higher rates, market prices have fallen significantly below your contracted rate (may justify early termination fee), or your business usage has changed substantially (may qualify for different rate structures).

Q: Are green or renewable natural gas options available in Illinois?

A: Yes, some suppliers offer Renewable Natural Gas (RNG) or carbon-offset products. RNG is biogas (from landfills, farms, wastewater) processed to pipeline quality. It's chemically identical to conventional natural gas but has lower carbon footprint. Expect to pay $0.05-0.20/therm premium for RNG or offset products. Valuable for businesses with sustainability commitments or ESG reporting requirements.

Q: What happens if my gas supplier goes bankrupt?

A: Your utility automatically returns you to utility default supply service—you will not lose gas service. Your initial contract with the bankrupt supplier terminates. You may lose prepayments if you paid in advance. You can immediately shop for new supplier or remain on utility supply. This is a rare occurrence but has happened with smaller suppliers. Choosing established, financially stable suppliers reduces this risk.

Sources

• Illinois Commerce Commission - Natural Gas Customer Information
• U.S. Energy Information Administration - Natural Gas Data
• Nicor Gas - Business Rates and Services