Chicago residents could see their monthly natural gas bills increase an average of $11.83 over the next year if state regulators approve rate hikes totaling $402 million, as requested by Peoples Gas on Friday.
The utility’s filing with the Illinois Commerce Commission marks the first rate hike proposal from Peoples Gas since 2014 — but consumer advocates say it’s the biggest the utility has ever offered.
The people are asking for permission to raise rates to $195 million, absorbing an additional $207 million in distribution costs to offset the $15-per-month surcharge that expires at the end of the year.
That surcharge has funded a pipe replacement program that could end up costing more than $8 billion by the time it’s finished in 2040, about six times more than the utility originally estimated in 2007.
The proposed increase comes at a time when homeowners have already seen heating bills rise this winter due to a sharp rise in natural gas prices around the world.
With the requested increase, a household that paid $867 in delivery fees in 2022 would pay nearly $1,009 next year, according to slides shared with consumer groups before People submitted paperwork with the Commerce Commission.
Despite requests for record hikes, Peoples says “typical customer bills are not expected to increase” because natural gas prices are projected to remain stable and low through 2024.
And since customers are already paying surcharge amounts that make up much of the total increase, the bottom line with bills for most of its 878,000 Chicago customers will remain “largely flat,” the utility claims.
The utility said in a statement, “The filing ensures Chicagoans will continue to have access to safe, reliable, environmentally sustainable energy – especially when temperatures drop below zero and below, as they recently did during the holiday. ”
Abe Schaar, director of the Illinois Public Interest Research Group, called the $15-per-month surcharge a “victory” for customers, but he urged state regulators to hold the public accountable for “its failed pipe replacement program.”
“Instead of approving the largest gas utility rate increase in Illinois history, the Illinois Commerce Commission should take this opportunity to limit rate hikes and rein in the out-of-control utility spending that is driving up gas bills in Chicago , ”Skaar said in a statement. “The People’s Gas Pipe Replacement Program is mismanaged, failed to address safety risks, ineffective for wide swaths of Chicago and absurd in the face of climate change.”
The Commerce Commission has the rest of this year to make a decision on People’s request, but that agency has a full docket of other rate hike requests covering much of the state.
North Shore Gas — which is co-owned with Peoples by Milwaukee-based WEC Energy — requested an $18.5 million rate hike, which would mean about $6 more per month for its 164,000 north suburban customers.
And Nikor, which distributes gas to more than 2 million people in the suburbs and the rest of northern Illinois, requested a $321 million increase earlier this week. This would be approximately $9.28 higher on the average monthly bill.
“Nicor Gas realizes the impact of any rate hike on customers and does not take this request lightly; However, this rate hike is necessary to drive our business due to inflation and increasing global impacts which continue to impact our operation and maintenance costs,” said a spokesperson.
The People’s Utility Board said in a statement shortly after requesting the rate hike, “[f]Or for the second time this week, we’re getting slammed with record-high rate hike requests for dirty, unsustainable fossil fuels. … We need stronger policy to help Illinois consumers transition to cleaner and more affordable energy sources.
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