Ameren Illinois says that natural gas storage fields, like this one in Glasford, help insulate its consumers from high supply prices during peak demand in winter. (Capitol News Illinois photo by Andrew Adams)
Article Summary
- Following the ICC’s approval of a $73 million rate increase for Ameren, the company’s residential customers can expect to see an average $3.65 increase on their monthly bills starting in January.
- This compares to $4.25 a month for customers of Nicor, the state’s largest gas utility.
- Ameren says its natural gas storage fields allow it to deliver heating to Illinoisians’ homes at a lower price, but consumer groups argue rates are still too high.
This summary was written by the reporters and editors who worked on this story.
CHICAGO — Ameren Illinois residential customers will see an average $3.65 increase on their natural gas bills in January after the Illinois Commerce Commission last week slashed proposed rate hikes for two of the state’s largest utilities.
Ameren, which serves approximately 816,000 customers in central and southern Illinois, initially held off on estimating the impact to customers until it could conduct an in-depth review of the ICC’s order, Brad Kloeppel, Ameren senior director of gas operations and technical services, said after the ruling.
The ICC’s Nov. 19 rulings arrived after an 11-month process of reviewing testimony and documents submitted by Ameren and Nicor, consumer protection groups and environmental advocates. The Commission approved a $73 million rate increase for Ameren and $168 million increase for Nicor, which were more than 40% lower than what the utilities had requested.
Nicor estimated that typical residential customers would see an increase of less than $4.25 monthly. Nicor is the largest gas utility in the state and serves 2.3 million customers in northern Illinois and the Chicago suburbs.
Both companies are eligible to propose new rate hikes to the ICC annually in January, though in recent years have done so every other year. Any request to raise rates receives a ruling from the regulatory commission 11 months after filing, usually in November, with any approved rate hikes going into effect the following January.
That means the earliest customers could expect rates to increase again would be in January 2027, or January 2028 if the companies stick to the alternate year request schedule.
Consumer advocates argued the rate increases go too far.
“While we’re pleased regulators lowered the size of these rate hikes, they are still the fifth increase for Nicor since 2017 and the fourth increase for Ameren since 2018,” Abe Scarr, policy director for Illinois PIRG, wrote in a statement. “Without intervention, gas bills will continue to rise.”
Utilities like Ameren and Nicor make money on infrastructure investments for delivering energy to consumers’ homes, but not on the price of gas itself; that is, gas supply price is passed through the utilities directly to customers.
Though delivery rates have increased, Kloeppel said Ameren works proactively to reduce supply costs to consumers.
“Ameren Illinois doesn’t control the market price of natural gas, and even though we pass those costs onto customers with no markup, we’re still taking a strategic look into how we can provide our customers with lower, more stable supply rates,” said Kloeppel.
He said Ameren’s investment in natural gas storage fields saves customers money, especially in the cold winter months. The company owns 12 underground storage fields as far north as Galesburg and as far south as Marion.
Underground storage allows Ameren to buy approximately 60% of its winter supply during the summertime when prices are lower and deliver heat to homes in the winter more cheaply and reliably, according to Kloeppel.
This strategy has allowed the company to reduce the cost of natural gas supply to consumers by 30% over the past five years and provide price protection from exposure to daily hikes during winter storms, he said.
But even with reduced supply costs and a smaller monthly rate increase of $3.65 compared to the $9.09 estimated in Ameren’s January request, consumer groups like the Citizens Utility Board say any increase in rates is too high.
“With winter heating season in full force, and prices for groceries and health care putting a squeeze on household budgets, conditions for consumers are extremely fragile,” CUB Communications Director Jim Chilsen wrote in a statement following the ICC order.
“We urge state regulators to continue to crack down on profit-mongering by Illinois’ gas utilities so no one is forced to choose between paying for fuel to heat or food to eat.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
