The Michael A. Bilandic Building in downtown Chicago, shown in May 2024, houses the offices of the Illinois Commerce Commission. (Capitol News Illinois photo by Andrew Adams)
Article Summary
- Nicor Gas submitted a rate request to the Illinois Commerce Commission on Friday, seeking a $221 million rate increase. If approved, Nicor customers can expect to see around $6 more per month on their bills in 2027.
- Utility watchdog groups denounced the move as a “money grab,” which comes two months after state regulators approved a $168 million rate increase in November.
- The ICC will have 11 months to review the request, giving consumer advocates the chance to intervene and argue against it.
This summary was written by the reporters and editors who worked on this story.
CHICAGO — Nicor Gas on Friday filed a $221 million rate hike request with the Illinois Commerce Commission, less than two months after state regulators approved a $168 million rate hike for the utility.
The company estimates that the increase, if approved in full, will add less than $6 to monthly gas bills for typical residential customers, or 6.7% annually, starting in 2027. Nicor distributes natural gas to around 2.3 million customers in northern Illinois.
Consumer advocates expressed outrage with the move, calling on state regulators to reject the request, which comes only days after Peoples Gas filed for a $202 million rate hike on Monday.
“I’m shocked that Nicor is proposing to raise rates again, just one month after imposing its last rate hike,” Illinois PIRG Director Abe Scarr wrote in a statement. “Nicor is busting its customers’ household budgets because it apparently refuses to live within its own.”
Illinois PIRG is a consumer advocacy group that often challenges rate requests by Illinois energy utilities. If approved in full by the ICC, Nicor’s request will have increased by about 170% in the last decade, according to PIRG, an increase it says is “significantly higher” than the state’s other major gas and electric utilities.
Nicor said in a statement that the investment is needed to enhance the reliability of its natural gas distribution system, particularly through extreme weather, and to remain in compliance with state and federal regulations.
That includes replacing aging equipment, inspecting and repairing over 400 miles of transmission pipelines, and safety-related replacement of over 45 miles of distribution lines, according to the company.
Consumer groups challenged the assertion that these investments are necessary now, saying the company has tripled its infrastructure spending over the past decade and that Nicor has already replaced its old iron pipes that were at a high risk of failure.
Gas utilities deliver natural gas to consumers at market rates and make money on the delivery of the gas, not on the gas itself. This, consumer groups argue, incentivizes overly aggressive spending on infrastructure projects related to gas delivery.
An analysis by the Future of Heat Initiative, an independent nonprofit that makes recommendations on utilities’ policy, found that gas delivery charges now make up 65% of customers’ gas bills in Illinois, up from 36% in 1984. The conclusion, the report finds, is that customers pay more for pipes and delivery of gas than for the gas itself.
The filing will undergo an 11-month review period by the ICC, giving consumer groups the chance to intervene and formally challenge spending requests. If allowed by the ICC, the rate hike would go into effect next January.
“If Nicor is granted this $221 million increase, it would push the utility’s total rate increases to more than $1 billion in less than a decade,” said Sarah Moskowitz, executive director of the Citizens Utility Board, a utility watchdog group created by the Illinois legislature.
“CUB will challenge Nicor’s money grab and we call on state regulators to crack down on the company,” she added. “We are deeply concerned that this sixth rate hike will push even more gas customers into hardship.”
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.
