Illinois providing loans to communities with skyrockting gas bills
(The Center Square) – Illinois communities dealing with staggering natural gas bills are getting temporary help from the state.
In an emergency session Thursday, the Illinois Finance Authority voted to make available low-interest loans to downstate communities like Morton, Divernon, Auburn and Riverton.
“Our February bill for gas, which we are currently estimating to be $4.6 million, we believe $3.5 million of that we believe is due to price gauging,” Morton Mayor Jeff Kauffman said.
During winter, municipalities usually pay about $2 to $3 per dekatherm of natural gas. Following the deep freeze that reached down to Texas, it shot up to $225 per dekatherm last week.
Rod Molnar, village clerk in Divernon, said his community needs help because its bill was more than $600,000 this month.
“To give you an idea, our bill for last month was $66,000, so we are looking at quite an increase and quite a hit on a small community like ours,” Molnar said.
Pritzker hopes the federal government can provide direct aid to the communities hit by the high prices. The state loan program is only temporary relief and will have to be paid back eventually, most likely by the town’s residents.
“The authority is, by statute, a finance loan making agency,” Chris Meister from the Illinois Finance Authority said. “The money that the authority will deploy is a loan and not a grant.”
The loans will have an interest rate of one percent.
Communities dealing with the huge natural gas bills have contracted with private companies. Some of the larger natural gas companies like Nicor and Ameren are able to stockpile supplies from the spring and summer in anticipation for the cold weather.
An Ameren spokesman said the company has 10 different pipelines that supply it with natural gas, as well as 12 underground storage fields that allow for the purchase of natural gas in the spring and summer for use in the winter. About 30% of the company’s supply is subject to price fluctuations due to its stored gas and hedging policy.
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