Business

Nicor Gas Rate Increase Cut by $140M After Settlement With Illinois Attorney General

Illinois Attorney General Kwame Raoul’s office has reached a settlement agreement with the Northern Illinois Gas Company to cut the natural gas utility’s requested rate increase by approximately $140 million.

Raoul on Wednesday announced the settlement, saying the deal allows Nicor to “retain good jobs in Illinois” while also protecting consumers from “drastic” rate increases.

“My office’s Public Utilities Bureau will continue to fight to ensure all customers are paying fair and reasonable rates for their utilities,” Raoul said in a statement.

Nicor, which serves 2.3 million customers across northern Illinois, sought a $221 million rate increase in January, which represented a 14.5% increase over current rates. The utility at that time said the increase was necessary to allow for “strategic investments” to help enhance the “safety, reliability and resilience of its natural gas system,” particularly during periods of extreme weather.

But consumer advocates expressed outrage with the move, calling on state regulators to reject the request, which had come less than two months after state regulators approved a $168 million rate hike for the utility.

Raoul’s office opposed Nicor’s request, claiming instead that significant portions of Nicor’s forecasted capital spending program were overstated or unnecessary, and that the utility inflated a routine accounting mechanism to bolster its profits.

As part of the settlement agreement, Nicor’s rate increase was cut from that $221 million request down to $81 million.

A Nicor spokesperson did not immediately respond to a request for comment Wednesday.

The settlement still requires the approval of the Illinois Commerce Commission.

According to Raoul’s office, the settlement will ensure most customers see a decrease in their monthly bill during non-heat months by reducing a fixed charge — which customers pay each month regardless of the amount of natural gas they use — down from $21.30 to $15 beginning Nov. 16.

Nicor must also accept a reduction in the profit it can make on its infrastructure investments, according to Raoul’s office, and has pledged to protect union jobs through next year.

“I deeply appreciate over 1,500 jobs of I.B.E.W. Local 19 members working throughout Illinois being considered and protected with the results of the Nicor Gas rate case,” Andy Nacke, the president, business manager and financial secretary of I.B.E.W. Local 19, said in a statement. “This is another example of the importance of labor continuing to have a seat at the table.”

Capitol News Illinois contributed to this report.

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