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Rising Gas Bills Could Exacerbate Hardships for Chicagoans This Winter, Consumer Advocates Warn
(Kenishirotie / iStock)
As freezing temperatures kick into high gear in the Chicago area, utility watchdog and consumer advocate groups are warning that rising gas bills are likely to exacerbate hardships for households looking to stay warm this winter.
A review of the gas market in northern Illinois released Thursday by the consumer advocate groups Citizens Utility Board and Illinois PIRG highlighted that rising natural gas prices, in addition to rate hikes from gas utility companies, are creating a “double-whammy” for customers, according to CUB Executive Director Sarah Moskowitz.
“The volatile market is hitting them with price spikes on one part of the bill, while utilities continue their aggressive spending to jack up rates on another part of the bill,” Moskowitz said in a statement. “While gas utilities enjoy excessive profits, we have serious concerns about the well-being of heating customers this winter.”
The Citizens Utility Board is a nonprofit utility watchdog group created by the Illinois General Assembly to represent the interests of residential and small-business utility customers.
Consumer advocate groups found supply prices charged by the gas utility Peoples Gas — the price for the gas itself that is then passed onto customers with no markup — were higher during every month this year compared to last year. In December, Peoples Gas, which serves the city of Chicago, had a supply price at 40.63 cents per therm, about 28% higher than last year, according to the review.
Peoples Gas spokesperson David Schwartz said in an email the December gas supply increase is due to the increasing nationwide cost of natural gas.
“We buy and store gas when it is typically lower priced and lock in guaranteed natural gas contracts at fixed prices,” Schwartz said in an email. “Peoples Gas does not profit from the cost of natural gas. Customers pay exactly the same as we pay for the gas.”
The alarms from consumer advocacy groups come as they expect Peoples Gas to push for a new rate hike next year after WEC Energy Group, the parent company of Peoples Gas, announced plans during a quarterly earnings call in October. The state regulating body the Illinois Commerce Commission last month also approved a rate increase of $168 million for Nicor Gas, which was slashed 47% from the utility company’s proposed rate hike request of $314 million. Nicor Gas serves customers in northern Illinois and the Chicago suburbs.
A final decision will be made over the next month regarding any future Peoples Gas rate filings, Schwartz said.
Major charges on gas bills are divided among supply, aka the natural gas cost, and delivery charges. Consumer advocates have argued that because gas utility companies can only turn a profit on delivery charges, and not on supply charges, it incentivizes them to spend aggressively on infrastructure investments and push for rate hikes.
In 2023, state regulators approved a $303 million rate hike for Peoples Gas, driven in part by the utility’s controversial project to replace its aging pipes across the utility’s delivery system. The project — which was put on pause until earlier this year when the ICC tightened the scope of the project — had been years behind schedule and billions of dollars over budget.
Nearly three-quarters of Illinois households rely on natural gas for heating.
In October, more than 142,900 households in Chicago were past-due on their Peoples Gas bills by more than 30 days, representing more than $66.5 million in debt, according to ICC numbers received by consumer advocates. In that same month, more than 55,600 households in the city received a disconnect notice.
The winter weather rule in Illinois is in effect from Dec. 1 to March 31, limiting utilities from disconnecting eligible customers who use electric or gas as their primary source of home heating.
Resources for Paying Your Gas Bill
Households struggling to pay their utility bills can apply for the Low-Income Home Energy Assistance Program, or LIHEAP, annually. Applications opened in October and will remain open through Aug. 15, or until funds are exhausted.
Ameren, Nicor Gas, North Shore and Peoples Gas natural gas customers and ComEd electric customers who qualify for LIHEAP or whose incomes are at or below 300% of the federal poverty level are also eligible for a monthly discount on their bills through the state’s low-income discount rates, according to an ICC news release.
Utilities including Peoples Gas and Nicor Gas offer some programs for customers to help pay energy costs and find ways to lower bills.
Customers whose service has already been disconnected should contact their utility directly to see if they qualify for reconnection at less than the full amount owed, the ICC recommends.
Capitol News Illinois contributed to this report.
Contact Eunice Alpasan: [email protected]
