Staffers for state utility regulators recommended this week that Nicor’s record-breaking $314 million rate hike request should be slashed by nearly $110 million for the suburban natural gas company.
Consumer advocates welcomed the cuts but urged the Illinois Commerce Commission to tamp down Nicor’s rate increases even further in their final decision expected next month.
Nicor requested the increase earlier this year, a move that would bump up the average monthly residential bill by about $7.50.
The company says the $314 million hike is necessary for critical infrastructure upgrades to serve its 2 million-plus customers across northern Illinois, including most of Chicago’s suburbs. That’s the cost of “affordable decarbonization that includes both gas and electric solutions,” according to Nicor.
But in a 380-page proposed order issued Monday, two administrative law judges for the Commerce Commission argued Nicor could meet safety and supply standards with about two-thirds of its request, recommending an overall hike of about $204 million.
Leaders at the nonprofit Citizens Utility Board said “there is more fat to trim” for the five-member Commerce Commission, which has the final say on how much utilities can charge customers.
“This proposed order is a promising step toward holding Nicor accountable, but we hope regulators will see that there’s plenty more room to do justice for consumers by eliminating wasteful spending and a bloated profit rate for shareholders,” CUB executive director Sarah Moskowitz said in a statement. “Now more than ever, consumers are counting on state regulators to alleviate the burden of relentlessly escalating utility costs, because no one should have to choose between keeping the heat on in the winter and putting food on the table.”
The proposed order knocked Nicor’s requested profit rate of 10.35% down to 9.93%, which would come out to annual profit of $471 million, according to the Illinois Public Interest Research Group.
Nicor’s requested hike would mark the largest increase in household gas prices in Illinois history, while the utility’s delivery rates have more than doubled over the past eight years en route to $25 billion in profits for their Atlanta-based parent, Southern Company, consumer advocates say.
Illinois PIRG Director Abe Scarr said regulators “can do more to limit the impact of Nicor’s fifth rate hike since 2017.”
Curt Stokes, director of the Environmental Defense Fund, said “we will ask the Commission in its final order to require utilities to pursue the most affordable, climate-smart options before repeating old, costly investments that drive rates higher than customers can afford.”
Regulators previously allowed Chicago’s natural gas supplier, Peoples Gas, to implement a record-setting $300 million rate hike, while clamping down on that company’s maligned pipeline replacement program. Gov. JB Pritzker’s administration wants to wean the state off fossil fuels in favor of renewable sources by 2050.