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Regulator's Staff Reports Rates Charged By Retail Suppliers
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The Office of Retail Market Development of the Illinois Commerce Commission ("Staff") has posted its Annual Report on the Development of Natural Gas Markets in Illinois
Effective January 1, 2020, Public Act 101-0590 requires all
AGS [alternative gas suppliers] to provide the Commission and the Office of the Attorney General the rates, "charged to residential
customers in the prior year, including each distinct rate charged and whether the rate was a fixed or
variable rate, the basis for the variable rate, and any fees charged in addition to the supply rate,
including monthly fees, flat fees, or other service charges[.]"
Staff reported that, "The statute does not require, and AGS did not provide, a description of the types of products associated
with the various rates charged or how many customers are enrolled on each rate. Given the number of
non-rate benefits, such as airline miles and smart devices, that the AGS utilize in their marketing
promotions, this omission often renders it difficult to accurately reflect the benefits provided to
customers."
The AGS rate information covered in the ORMD rate reports includes information from September 1, 2021
through August 31, 2022
Staff reported that, in the Nicor territory, the highest rate
charged was a variable rate of $2.173 per therm, which was charged between July and August 2022..
The lowest rate charged in the Nicor territory was a variable rate
product of $0.099 per therm charged beginning in April 2022.
For
the North Shore Gas territory, the highest rate charged was a variable rate of $1.599 per therm with a
$6.95 additional monthly fee, which was charged for August 2022. In the North Shore Gas territory, the
lowest reported rate was $0.18 per therm and it is a variable rate product for the time period starting
May 2022.
In the People’s Gas territory, the lowest reported rate was $0.176 per therm and it is a fixed
rate product for the time period starting September 2021. For the People’s Gas territory, the
highest rate charged was a variable rate of $1.864 per therm, which was charged for August 2022.
Staff noted that, "Additionally, several AGS offer subscription or flat fee products pursuant to which residential customers
pay the same amount throughout the life of the contract, which tends to be twelve months, regardless
of usage. While there was an AGS that charged a subscription fee as low as $6.99 and one that charged
as high as $752.82, most of the subscription products ranged from $50 to $250 a month."
Staff further reported, "Many of
the fixed rates reported were only charged for two to three months at a time despite most of the fixed
rate offers posted on the ICC website have a term of at least one year."
Staff noted that many AGS reported charging the same variable rate for several months and even several years.
Staff's report also reviewed market concentration in the Small Volume Transportation (SVT) market.
For the small non-residential portion of the SVT market, all HHI
designations remain steady, Staff said.
"Nicor Gas and North Shore Gas have maintained their year-over-year
concentration levels with Nicor Gas remaining competitive and North Shore Gas remaining moderately
concentrated. Peoples Gas saw a decrease in competition and moved from the competitive level to
moderately concentrated. All territories saw a rise in HHI values which signifies a decrease in
competition," Staff said
"When looking at the residential subset of the SVT market in the next figure, all three territories
remained relatively stagnant compared to last year. Similar to the non-residential SVT market, the
residential SVT market experienced a rise in HHI values across all three utility territories. The increase in
HHI values indicates a decrease in competition, however, it was not significant enough to change any
competitive designation. The residential SVT market remains competitive across all three utility
territories," Staff said
To get a better sense of how the residential market was being served, Staff sorted the data to determine
how many suppliers fell into percentile portions of the market share ranging up to 15% or more. This information is shown in the table below.
In the Nicor Gas and North Shore Gas territories, the number of suppliers with more than 15% of the
market has remained stagnant. For the second year in a row, no supplier in the Peoples Gas territory
served more than 15% of the market. Total active suppliers in Nicor Gas and Peoples Gas territories have
increased, and the number of active suppliers in the North Shore territory remained the same as last
year.
In terms of customer switching, Staff reported that SVT suppliers serve more than 230,000 residential and more than 52,000 small non-residential
customers, representing 8% of eligible residential customers and more than 18% of small nonresidential customers
All three utility territories saw a decrease in the quantity of residential customers being served
by AGS versus the prior year
In the Large Volume Transportation (LVT) segment, AGS suppliers serve more than 30,000 LVT customers in Illinois which is 8.54% of the eligible
customers. AGS across all four utility areas service 7-12% of LVT customers while providing 64-85% of the
total therms consumed by LVTs
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October 26, 2022
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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