Business
Peoples Gas and Nicor Are Seeking Rate Hikes. Here’s What to Know
Your monthly heating bill could be going up.
That’s if the Illinois Commerce Commission approves a $202 million rate increase for Peoples Gas, which supplies natural gas to nearly 900,000 Chicagoans. The company said it would mean a monthly bill increase of about $10 to $11.
Meanwhile, Nicor Gas, which has 2.3 million customers in northern Illinois, is requesting a rate hike of $221 million. The company said the increase would add less than $6 to monthly bills.
Both companies said the money will be used to upgrade infrastructure as a matter of public safety.
David Schwartz, a spokesperson for Peoples Gas, said some of his company’s natural gas pipes are in their final years of usability.
“We must have a safe, reliable heating system in Chicago,” Schwartz said. “The pipes currently running underneath the ground are nearing the very end of their useful lives. The closer it gets to the actual end of their useful lives, which is coming before too long, the risk of an issue becomes a much greater concern.”
Schwartz said the funds generated by a rate hike would also go toward increased “environmental sustainability” in the Peoples Gas system, stopping leaks and shifting toward renewable natural gas and hydrogen.
Consumer advocates in Chicago said some infrastructure upgrades are needed, particularly replacing old iron pipes with new plastic piping.
But all projects should be viewed in the context of repeated rate hike requests over the past decade, said Abe Scarr, director of the Illinois Public Interest Research Group, a consumer advocacy organization.
“Nicor has raised rates already by 137% since 2017, and Peoples Gas rates have effectively doubled over the last decade,” Scarr said. “While there is some important need for some investment, a lot of the time what we’ve found is they’re overinvesting and spending wastefully in ways that drive up their profits and drive up our bills, but don’t deliver those safety improvements.”
Schwartz said Peoples Gas’ request is an attempt to comply with ICC orders to remove more than 1,000 miles of old piping by an accelerated 2035 deadline, moved up from 2040.
“That is why we filed this request,” Schwartz said. “To be able to do the work that the ICC directed us to do.”
Likewise, Nicor Gas said in a news release that new rates would allow the company to “enhance the safety, reliability and resilience of its natural gas system” and comply with “state and federal safety standards.”
Nicor’s request comes less than two months after its most recent $168 million rate hike. The company had originally requested a $314 million increase but was ordered by the ICC to cut the request by 47%.
“They (Nicor) asked for about twice as much as they got in the last rate hike,” Scarr said. “The Citizens Utility Board, Illinois PIRG and the Office of the Illinois Attorney General were able to document that a lot of that spending they were requesting was unnecessary, and the regulators at the ICC agreed. … To come back months later and ask again shows a lot of chutzpah.”
The ICC is expected to review both requests over the next 11 months. If approved, the new rates would begin in 2027.
Peoples Gas President Maria Bocanegra published an opinion piece in Chicago Crain’s Business, arguing for the rate hikes.
“Chicago home heating bills are significantly lower than those in other major U.S. cities, and that is expected to continue after the new rates would take effect,” Bocanegra wrote.
Jim Chilsen, communications director for the Citizens Utility Board, a utility watchdog group, said even an increase as low as $10-11 in monthly bills could be enough to disrupt families on the brink.
“The gas companies should talk to the people who call CUB — far too many are struggling to afford their bills,” Chilsen said. “They leave out, conveniently, the fact that there are large portions of the city that are in a heating affordability crisis.”
