Ameren Warns Customers For Higher Natural Gas Prices Over the Winter

By Benjamin Cox on November 11, 2021 at 5:32pm

Ameren-Illinois says people may have a tough time paying their utility bill this winter due to the rising prices on natural gas.

Ameren’s Tucker Kennedy says its a matter of simple supply-and-demand economics. Kennedy says the price per therm of natural gas has risen by 75% over the last year reaching a 13-year high on the global market. Kennedy says the problem boils down to two items: “The economy is obviously heating up. It’s coming back. Production is up, but we had this phenomena where, during Covid, natural gas production was down because there wasn’t demand. We are starting to see pent up demand and tightening supply. All of that has sort of conspired to result in a global increase in the cost of natural gas itself – that commodity. Here in Illinois we have reached a 13-year high, and natural gas makes up a pretty significant portion of our customers’ energy bills. We have two sides to the bill – the supply and delivery. The supply is the cost that we pass on directly one-to-one, dollar-for-dollar with no mark up, and then we charge for delivery. That cost of the gas itself, because that’s going to be significantly higher, we are just conferring to our customers that there is likely going to be some higher winter heating bills this year.”

Kennedy says with a predicted cold winter this year, usage will be up across Central Illinois and likely cause utility bills to increase even more than last year. Ameren says that even with average temperatures this winter and usage in the region staying normal, an estimated 30% increase is still expected in utility costs this winter.

Kennedy says that Ameren has tried its best to prepare for the winter by purchasing natural gas this summer: “Sixty-five percent of the gas that we will deliver this winter, we have already bought. We are able to hedge those costs increase pretty strongly just by our storage strategies. We buy it in the summer when those prices are lower. We keep it in our underground storage fields until there is demand. We are able to hedge a lot of these global spikes, but about 35-40% of that we are still going to have to go out and get on that spot market. There is a lot of other utilities and a lot of other energy companies that are dealing with the same thing. This is a national issue and that is just what’s kind of factoring into what we are expecting to be some higher winter heating bills.”

Kennedy says that area residents should do their best to make their home as energy efficient this winter. Tips on Energy Saving can be found in Ameren’s Energy Saving’s Guide. For those who are truly in dire trouble, Ameren says to call and discuss programs like Budget Billing, Warm Neighbors Cool Friends, or the LIHEAP programs with Ameren associates.