Chicago: City asks gas company to cut bills--64% increase predicted this winter

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Chicago: City asks gas company to cut bills--64% increase predicted this winter

October 7, 2000

BY FRAN SPIELMAN CITY HALL REPORTER

The Daley administration asked Peoples Gas on Friday to average out customer bills to ease the burden of skyrocketing natural gas costs this winter for cash-strapped consumers.

"If we were talking about Beanie Babies for Christmas and a shortage there, it might be different. This is a product that everybody absolutely depends upon," Environment Commissioner Bill Abolt said.

"We're not saying they wouldn't be able to recover their costs. We're just asking them to recover them over time. Provide consumers a break. Give them an advance. The company is in a far better position to weather the winter and have the cash flow to deal with it than a lot of people, particularly senior citizens."

In a meeting with Peoples Energy Corp., City Hall essentially asked the utility to offer customers a glorified version of the so-called budget payment plan.

The plan allows consumers to average out their bills over a year, instead of receiving wildly high bills in winter and paltry ones in summer.

The payment schedule could be stretched out for more than 12 months as a result of Friday's "cordial and cooperative" discussions, according to Peoples Gas spokeswoman Desiree Rogers. Another meeting is set for next week.

"We're not at odds at all in terms of what the goal is. The whole idea is to do everything we can to ease this for consumers. We think we'll come up with some options on our budget payment plan that might stretch it over a longer period," she said.

The bombshell that consumers had been dreading for months was dropped on them earlier this week--and it was a lot bigger than anybody expected.

Peoples Gas said its Chicago customers could pay a whopping 64 percent more to heat their homes than they did last winter as natural gas prices surge and the booming economy places even greater demands on a tight supply. In July, the company had predicted a 20 percent increase in home heating costs.

Rogers insisted that Peoples Gas was virtually powerless to avoid the increase. The company is "not a producer" of natural gas. It merely purchases gas on the national market and passes the cost to consumers, with no markup, she said.

Meanwhile, state Rep. Bill Black (R-Danville) said he wants to stop collecting the sales tax on natural gas from December to May, a move he said could save consumers an average of $10 to $15 per month.

"It's a reasonably simple thing the state can do," Black said. "It isn't going to give major relief, but it will help some."

The state sales tax on natural gas is 5 percent of the total bill, or 2.4 cents per therm, whichever is less. Natural gas transmission companies are charged the tax, but they pass that cost on to consumers.

Contributing: Associated Press

http://www.suntimes.com/output/news/gas07.html

-- Carl Jenkins (Somewherepress@aol.com), October 08, 2000


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