Heads up regarding natural gas billing for this winter.

Our gas company is Alliant Energy, and this month they had a brochure enclosed with the bill. This brochure offered a "worryfree" billing rate the next 12 month period beginning with the December bill, provided you sign up by mid November. In this month's bill they included a quote for a monthly payment of $125.53 plus any taxes. Now, when I called to ask about this billing plan, I was told that that this simply locks you into a guaranteed rate that you would pay regardless of how much gas per unit prices would increase over the winter time. You would essentially pay the same rate all year long. We have a gas furnace and water heater. Our home is a 2 story, 3 bed room. Now our average use of gas in the summer is around $25/mo, and over the past 3 years the highest monthly bill we've paid for a single winter month has been $184, but averages about $170 most winter high use months. We can expect 4-5 months of winter temperatures each year. Now in 04, our yearly gas bill was $950, and our bill to date for this year is $530. It appears that the Worryfree guaranteed rate is calculated at nearly 70% above our annual usage thus far. I find this interesting because the gas company sent something around earlier in the year speculating that there MIGHT be as much as a 70% increase in gas prices. I'm not sure anymore which comes first--the chicken or the egg. Chances are that our usage rate will be a little less this year because of some weatherproofing and other adjustments we've made in our usage pattern. I know this will probably be a useful billing tool for some customers, but I just wanted to point out you should check your bills for a couple of years to get an idea of how cost effective this is for you. We elected not to participate at this point, but may change our minds and do this next year.

If gas prices stay lower or the winter is warmer than normal, you are obligated to pay at a higher rate. If the worst case scenario occurs, you stand to break even or avoid outlandish bills. I realize that there is a great deal of variability, depending on your living circumstances and location. Just thought I'd toss this out there for everyone's consideration.

I didn't think it sounded right, either.

...if not identical. Our gas provider is Nicor and we decided that it would only work to the benefit of Nicor in our case. When we called them they couldn't even answer our questions.

Cheers!

I think they misinformed you.

Monthly billing (called "Budget Billing" in many areas) such as you describe has been around for ages. My understanding is that this is supposed to be a monthly average of what you've used for the past year (maybe even two years, depending on different factors.)

At any rate, I don't think you're "locked" into anything, except the monthly average billing. If you use more than they've estimated, based on your average, you will pay it, sooner or later.

Budget billing is just supposed to allow the consumer to know what their bill will be each month and budget for it, rather than have a staggering bill hit when you can least afford it.

It appears to me that Alliant knows it's going to be charging you, the consumer, at least a 70% increase and is allowing you to do "budget billing." It's all going to come out in the wash, either way you go.

says so in the brochure. The company rep told me the same thing. You can opt to use budget billing which functions in the manner you outline. OR you can select this worryfree billing which locks you into the rate they are contracting with you for the period of a year.

You lock in at a "guaranteed" rate. (An example: 4.5 MCF @ 17.5347) This rate is supposed to remain unchanged, regardless.

I tried this a few years back.(if this is what you speak of) It averaged out to what I would normally pay. They get you with hidden fees and "delivery service."

We've had "Budget Billing" here for years. You're not locked into a lower rate by any means. My elderly neighbor tried budget billing a few years back, thinking that she could use her furnace more through the Winter and her rate would be the same. The month following her increased usage, her budget amount went through the roof.

Personally, I've always preferred to manage the few months of higher heating bills, than to be stuck with larger bills throughout the warmer months.

The companies will get you either way.......

On edit: spelling

itself out if I have over paid there is a negative balance and a payment can be skipped. It's just averaging.

in your area. One week ago here in my area( north central IN) it was $1.67gal. Farther south it was 15 to 20 cents a gal. cheaper.

Gonna be a damn cold winter around my place.

COMPANIES SUCK. I've budgeted for the worst-case 70-percent increase, and I know it's doable because I've been keeping a spreadsheet that's a combination check register and budget, five years out. Based on what I paid the gas company from September '04 through August '05, the 70-percent increase averages out to $79.44 a month, with a high of $117.94 for November-March. So I'd be pretty stupid to lock myself into a monthly payment of more than $80.

On second thought, I'd be pretty stupid to lock myself into a monthly payment of more than the average of what I actually paid in the last 12 months.

And my understanding of budget billing is that if the actual bill goes over or under the average, you get a debit or a credit. I'd rather have the extra cash in the summer months.

...calculator I realized it was no "deal". I have NICOR gas.

Don

...is going to offer them a deal that, when averaged across all their customers, benefits the customers instead of the company, is fooling themselves.

And, when I asked, I was told to expect more increases -- at least 50% but probably more along the lines of 75%.