Chicago, Illinois Commercial Natural Gas

Chicago Commercial Natural Gas: America's Third-Largest City

Chicago—the economic capital of the Midwest and America's third-largest city—presents immense natural gas procurement opportunities for businesses. From Loop high-rises to manufacturing facilities in the industrial corridors, from restaurants on Restaurant Row to healthcare campuses, Chicago's commercial natural gas demand is substantial.

Illinois's deregulated natural gas market means Chicago businesses can choose their supplier, creating opportunities for significant cost savings through strategic procurement.

Understanding Chicago's Natural Gas Market

Peoples Gas Service Territory

Peoples Gas serves the City of Chicago:

• Delivery: Peoples Gas owns and maintains pipelines within city limits
• Default supply: They offer gas supply if you don't choose an alternative
• Alternative supply: You can choose a competitive supplier
• One bill: Regardless of supplier, you receive one consolidated bill

Suburban Considerations

If your business has locations in the suburbs, they're likely served by Nicor Gas, which has its own supplier choice program.

Illinois Commerce Commission

The Illinois Commerce Commission (ICC) regulates natural gas utilities and alternative gas suppliers (AGS). All suppliers must be licensed by the ICC.

Cost Reduction Strategies for Chicago Businesses

1. Compare Alternative Gas Suppliers

Multiple licensed suppliers compete for Chicago commercial business:

Factor	What to Compare
Per-therm rate	Base commodity cost
Rate structure	Fixed vs. variable vs. index
Contract term	12-36 months typical
Monthly fees	Some charge, some don't
Early termination	Penalties for early exit

The ICC maintains a list of licensed suppliers at pluginillinois.org.

2. Understand Rate Structures

Chicago suppliers offer various pricing models:

Fixed Rate

• Locked price for contract term
• Budget predictability
• Protection from spikes
• Miss savings if prices drop

Variable/Index Rate

• Price changes monthly
• Tied to NYMEX or other index
• Potential for savings
• Exposure to volatility

Blended Approaches

• Portion fixed, portion variable
• Balances protection and opportunity
• Common for sophisticated buyers

3. Leverage Your Volume

Chicago's commercial sector ranges from small businesses to major corporations:

• Under 10,000 therms: Standard commercial rates
• 10,000-50,000 therms: Request custom quotes
• Over 50,000 therms: Negotiate directly
• Over 200,000 therms: Consider transportation-only service

Larger users have significantly more leverage.

4. Time Your Purchases

Natural gas prices fluctuate. Monitor EIA data:

Generally favorable periods:

• Late spring and summer
• After mild winters
• When storage is full

Higher cost periods:

• Peak winter heating
• Extreme cold events
• Supply disruptions

Chicago's harsh winters mean heating costs are a significant factor—strategic timing matters.

5. Aggregate Locations

Multi-location Chicago businesses can combine for better rates:

• All city locations under one contract
• Suburban locations (if same utility)
• Regional facilities across Illinois
• National aggregation for large enterprises

Industries We Serve in Chicago

Commercial Real Estate

Chicago's skyline represents billions in commercial real estate with substantial natural gas needs:

• High-rise heating and hot water
• Portfolio-wide procurement
• Multi-tenant building strategies
• Property management coordination

Restaurants & Hospitality

Chicago's world-class restaurant scene, from Michelin-starred establishments to neighborhood favorites, depends on natural gas:

• Commercial kitchen operations
• Restaurant group multi-location deals
• Hotel heating and hot water
• Event venue climate control

Explore: Restaurant Natural Gas Solutions

Healthcare

Major health systems—Northwestern, Rush, University of Chicago Medicine, Advocate Aurora—have extensive natural gas requirements:

• Hospital campus procurement
• Multi-facility coordination
• Budget-aligned fixed pricing
• Reliability-focused contracts

Manufacturing

Chicago's remaining manufacturing base, from food processing to fabrication, uses natural gas for process heating:

• Industrial-scale procurement
• Process heating optimization
• Volume-based negotiations
• Interruptible service options

Education

CPS, universities, and private schools require reliable heating:

• Campus-wide procurement
• Budget year alignment
• Multi-building coordination
• Long-term strategic planning

Financial Services

The Loop's concentration of financial firms means significant commercial real estate energy needs:

• Office building heating
• Data center cooling support
• Portfolio-wide strategies
• Budget predictability focus

Chicago Heating Costs: The Winter Factor

Climate Impact

Chicago's notorious winters make heating a significant cost factor:

• Average January temperature: 27°F
• 6,500+ heating degree days annually
• Significant seasonal price variation
• Critical budget planning item

Winter Preparation

Chicago businesses should:

• Lock rates before winter if possible
• Review heating equipment efficiency
• Consider budget billing for cash flow
• Monitor weather forecasts for spikes

Polar Vortex Considerations

Chicago experienced extreme cold events that spike demand:

• 2019: -23°F with wind chills to -50°F
• 2014: Extended subzero temperatures
• These events can cause price spikes

Consider some fixed pricing for budget protection.

Understanding Your Chicago Gas Bill

Bill Components

Your Peoples Gas bill includes:

1. Delivery Charges (Peoples Gas)

• Customer charge (fixed monthly)
• Distribution charge (per therm)
• Regulatory charges
• Taxes and fees

2. Supply Charges

• Gas cost (per therm)
• From Peoples Gas or your chosen supplier
• This is where shopping creates savings

Rate Schedules

Peoples Gas commercial rate schedules:

Schedule	Description
S.C. No. 2	Small Commercial
S.C. No. 3	Large Commercial
S.C. No. 4	Large Volume

Delivery charges apply regardless of supplier choice.

Compare Illinois Cities

Businesses with Illinois operations should coordinate procurement:

• Aurora - Western suburbs
• Naperville - DuPage County
• Joliet - Will County
• Rockford - Northern Illinois
• Springfield - State capital
• Illinois statewide

Transportation-Only Service

Large Chicago commercial and industrial users can consider transportation service:

• Purchase gas directly from marketers
• Peoples Gas provides delivery only
• More complex but potentially lower cost
• Requires significant volume and expertise

This option is typically for users over 200,000 therms annually.

Learn more: Understanding Natural Gas Deregulation

Energy Efficiency Programs

Peoples Gas Rebates

Peoples Gas offers commercial efficiency programs:

• Equipment rebates
• Custom incentives for large projects
• Energy assessments
• Prescriptive measures

Check Peoples Gas website for current programs.

Chicago Energy Benchmarking

Chicago requires annual energy benchmarking for buildings over 50,000 sq ft:

• Understanding natural gas usage
• Identifying efficiency opportunities
• Compliance requirements
• Public disclosure considerations

Get Your Free Chicago Analysis

Natural Gas Advisors helps Chicago businesses optimize natural gas costs:

1. Bill Analysis: Review your current Peoples Gas bills
2. Supplier Comparison: Compare licensed alternative suppliers
3. Contract Review: Evaluate terms and identify opportunities
4. Negotiation Support: Secure competitive commercial rates
5. Ongoing Management: Monitor renewals and market conditions

No cost to businesses—suppliers compensate us directly.

Whether you're a restaurant group, a healthcare system, a property management company, or any business in Chicago, Illinois's deregulated market offers savings opportunities.

Chicago businesses understand competition and procurement. Apply that expertise to your energy costs. Contact Natural Gas Advisors today for your complimentary Chicago energy analysis.