Consumer advocates want Nicor Gas to cut its proposed $220.8 million rate hike by 80%, saying the company is overzealous in seeking profit.
Those advocates are seeking a $178 million cut to the proposal, according to filings to the Illinois Commerce Commission from the Illinois attorney general’s office and groups including the Citizens Utility Board and Illinois PIRG.
They say the utility company’s estimates are “overstated” and “inappropriate.”
But it is ultimately up to the Illinois Commerce Commission, which may rule later this year on the company’s request. Nicor’s proposal could bump gas bills by an average of $72 per year for the company’s 2.3 million customers across the northern part of the state.
“We’re asking the ICC to make this wealthy monopoly live within its means like the rest of us,” said Eric DeBellis, counsel for the Citizens Utility Board, a nonprofit consumer advocate group, at a Monday news conference.
Nicor’s proposal, filed earlier this year, was submitted less than two months after the Illinois Commerce Commission approved a separate $168 million rate increase for the company. That increase raised average monthly bills by $4.25, though it was still a 47% cut from the company’s original 2025 proposal.
The groups argue that Nicor’s increase in capital spending is driving the rising costs. They say that spending could be cut by $97 million.
Nicor’s capital spending skyrocketed in 2015 after a state law temporarily gave it license to do so while replacing its leak-prone cast iron pipes.
The consumer groups say Nicor replaced the last cast iron pipe in 2018, but has continued spending three times as much annually prior to the temporary law’s passage. Meanwhile, household gas usage has decreased 26% statewide.
Illinois PIRG Director Abe Scarr said the company wants to “create a new normal of spending” by keeping up capital costs without the projects to back it.
Half of the suggested cut comes from the company’s push for a larger rate of return for investors. Consumers advocates say that could be reduced by shaving return on investment from the requested 10.35% to 8.95%. It makes up for $89 million of the proposed increase.
That’s while nearly 200,000 Nicor customers are behind on their bills for a total of $704 million, according to state data.
“We are working to keep bills as low as possible, while also managing costs to meet evolving regulations that require investment in a resilient energy infrastructure,” Nicor said in a statement.
The proposed rate hike also includes cost estimates for items that don’t qualify, according to testimony from the attorney general’s office. For instance, the proposal includes $5 million to cover lawyers’ fees and other costs associated with arguing for the increase. Another $19.1 million would go to profit-incentive executive bonuses.
The groups also oppose Peoples Gas’ recent request for a $202 million rate hike.