Nicor Gas has submitted a request to state regulators for a significant rate increase, aiming to collect an additional $221 million annually. The utility, which serves approximately 2.3 million customers across northern Illinois and the Chicago suburbs, asserts that this financial boost is essential for maintaining its extensive gas distribution system. If approved by the Illinois Commerce Commission, residential customers can expect their monthly delivery charges to rise by about $5 to $6.
The request was formally filed on January 9, 2024, detailing plans to repair over 400 miles of transmission pipeline and replace approximately 45 miles of distribution pipe. Nicor anticipates that the new rates could be implemented by 2027 if they receive the necessary regulatory approval.
Regulatory Landscape and Previous Requests
In its previous interactions with the Illinois Commerce Commission, Nicor faced significant pushback. Last November, the commission approved a smaller rate increase of $167.8 million, while rejecting around $120 million in capital investments that Nicor had proposed. The commission’s actions underscored its willingness to scrutinize the utility’s requests closely, a trend that may influence the current proposal.
Nicor’s recent filings highlight the commission’s previous decisions, indicating that certain vintage pipeline replacement projects were excluded from near-term cost recovery. This ongoing scrutiny suggests that the regulatory body will again carefully assess Nicor’s financial needs and proposed improvements.
Competition and Consumer Concerns
Nicor is not alone in seeking additional funding. Peoples Gas has also filed for a rate increase of approximately $202.3 million to expedite pipeline replacement efforts, potentially raising the monthly delivery charge for typical Chicago households by $10 to $11. Similarly, North Shore Gas, a subsidiary of Peoples Gas, is pursuing a rate increase of about $14.4 million.
Consumer advocacy groups have voiced concerns regarding these successive rate hikes. According to Sarah Moskowitz, Executive Director of the Citizens Utility Board, if Nicor’s request is approved, the total amount of rate increases sanctioned for the utility over the past decade would surpass $1 billion. This trend raises alarms about the financial impact on households already burdened by rising living costs.
The Illinois Commerce Commission typically takes up to 11 months to deliberate on general base-rate cases, a process that includes public hearings and expert testimonies. Historically, this thorough review has led to modifications of the initial requests, as regulators often trim proposals that lack sufficient justification.
Support Options for Customers
In light of potential rate increases, Nicor Gas has emphasized that support is available for customers who may struggle to keep up with rising bills. The Nicor Sharing Program and various payment plans are designed to assist those in need, with details readily accessible on the company’s customer service pages.
As Nicor navigates its regulatory challenges and works to enhance its infrastructure, the utility’s future rate adjustments will be closely monitored by both regulators and consumers alike. The ongoing dialogue will be crucial in determining the balance between necessary improvements and the financial impact on households across Illinois.
