Were all this not frustrating enough, it's tough to know who or what to blame. Nicor chalks up the surge to basic economics. Gas producers in Canada and Texas and other southern states had little motivation to drill new wells when prices and consumption were low. In other words, producers felt that profits of late weren't large enough to warrant the expense of scouting new underground reservoirs. Whyte said Nicor doesn't benefit from higher prices because federal law requires the utility to furnish natural gas to customers at cost.
Deregulation allows gas brokers to compete with the local utility for sales.
Prices offered by alternate suppliers aren't unregulated. But 95 percent of consumers in northern Illinois still buy gas directly from Nicor. Nicor makes money by charging fees for delivering gas through its pipelines, no matter the supplier. Sterling and Whyte expect the market to correct itself, with prices returning to more palatable levels in 18 to 24 months. Valeri DeCastris is less optimistic.