If you live in a Polar Vortex Climate, such as ours in the Midwest, you may want to take a look at your gas bills.
Actually, we did a nice little seasonal look-see on the gas bills. We went back almost a year and wanted to figure out where there were ways to really save. We found one – and, as we often will tell you, your experience may vary. Without further ado, here’s one way to save on your winter gas bill now.
Background: we’re just north of Chicago. It got cold last year – four missed school days in a district we nicknamed “District 7-Eleven: We Never Close.” (Historically, no days canceled for weather in the district for 50 years, then 4 days in one year. All thanks to the Polar Vortex.) Our natural gas delivery comes from Nicor – which seems to do a fine job for us.
So imagine the sticker shock that we had last Spring (it was SPRING) when this arrived in the mail.
Yes, that was one crazy gas bill.
How to Hedge Your Gas Bill
We started our journey with some economics. To say this is a product of supply and demand is a gross understatement: with this past Winter being crazy cold, natural gas demand was huge. Supply got squeezed. Costs went up.
Take a look at this quick spreadsheet and you’ll see the calculations – going from August (most recent bill) back to last November. Ten months, and the Cost Per Therm category fluctuated big time. (The March bill is the one referenced in the other photo; there are other charges on the bill that don’t fluctuate and we won’t go into them here.
Now, we used to do an Average Billing program with Nicor, but all that did was take the previous year’s bill history and divide it by 12, then make you pay the average amount. It didn’t tackle fluctuating prices in the Cost Per Therm – which is where you’re at the mercy of fluctuating supply and demand.
So, when we got the mailer from Nicor that said we could lock in a price for twelve months, we first tried to figure out if it was a deal. Our AVERAGE (highlighted in the spreadsheet) Cost Per Therm was figured by dividing the Energy Cost by the Therms in Column B. (I emphasize the word “Average” because, if you looked at the average of the prices themselves without weighing in the amount used each month, your figures will be way off. You’d see “$0.65) and you’d think “that’s not too bad.”)
$0.579 Per Therm? Yes!
Nicor has four programs – only one of them locks in a guaranteed price for 12 months. We’re not energy traders so we didn’t want to play the field, so to speak. If they were offering us an average of 57.9 cents per therm, we’re taking it.
Our projected savings – based on last year’s usage but with the locked-in pricing? More than $500 for the year.