Deregulation pays off in Gibson City
GIBSON CITY– John Gesell says he doesn't mind opening his natural gas bills any more.
His gas bills and the bills for 187 other Gibson City residents have decreased by about $20 a year since the community took advantage of utility deregulation to switch natural gas providers.
"This is a great deal for me and a lot of other homeowners in Gibson City," Gesell said.
A group of Gibson City businesspeople called the Gibson City Energy Commission has been working since 2002 to bring down natural gas prices in this Ford County community.
The commission got its start when Darrell Rickey, the owner of a dry cleaning business in town, got fed up with his natural gas bills. At the time, Gibson City was served by NICOR Gas.
"I read about the state passing utility deregulation, so I wondered if I could switch my gas provider and save some money," he said.
Rickey's business uses about 8,000 therms of natural gas per year.
"That wasn't enough business to get the attention of the various gas companies," Rickey said. "Then I got the idea of pooling resources with the other businesses in Gibson City so we could all save money."
After consulting with Mayor Brady Peters, Rickey persuaded several other businesspeople to form an independent energy commission.
"Darrell came to me after my election and explained that he wanted to look at lowering gas prices and other utilities," Peters said. "I gave it my support because we need to do anything we can to save money collectively for our citizens."
The commission first met with Gibson City businesses to see if they would be interested in switching natural gas providers.
After 60 firms, using some 300,000 therms of natural gas per year, got on board with the program, the commission asked for proposals from natural gas companies. Six of them submitted proposals, with People's Energy of Naperville providing the lowest offer.
All 60 businesses, including the city, signed contracts with People's Energy in September 2002. So now NICOR provides the pipes and delivers the gas, but the businesses buy their gas from Peoples Energy.
The contracts provided the businesses with natural gas at a set monthly price of 40 cents per therm in 2002-03. Under the old system, those businesses would have been paying as much as 92 cents per therm.
"It paid out some big dividends for us the first year," Rickey said. "It was nice to take the burden of high natural gas prices from the shoulders of our manufacturing businesses."
The 2003-04 contract with People's Energy set the natural gas rates for the businesses at about 62.5 cents per therm. Before deregulation, those businesses would have paid as much as 80 cents per therm.
"We estimate that the average business saved about $180 last year by switching to People's Energy," said Randy Berger, a science teacher who serves on the commission.
The commission then began to see if homeowners were interested.
After 168 homes, averaging between 1,400 and 1,500 therms each, signed up for the program, the commission again sought bids from natural gas companies.
This time three companies responded, with the lowest bid coming from the Bloomington-based Corn Belt Energy Cooperative.
"It was a good situation for us," said Dave Hawkinson, director of marketing for Corn Belt. "We appreciate the leadership of the Gibson City energy commissioners."
Hawkinson said he is unaware of any other communities in Illinois that have taken the step to seek proposals to switch natural gas providers.
"Gibson City was the first," he said. "We believe this was a good situation not only for Gibson City, but also for the members of our co-op. This has been one way that deregulation has been positive for us."
Peters said he believes Gibson City's aggressive steps to lower utility rates will make the community a more attractive for businesses.
"We want Gibson City to be a front-runner as far as working for the taxpayers, business owners, homeowners and utility users," Peters said.
You can reach Tim Mitchell at (217) 351-5366 or via e-mail at firstname.lastname@example.org.