Legislation aims to end infrastructure surcharge on Illinois heating bills

[February 01, 2022]  By Kevin Bessler

(The Center Square) – Advocates and Illinois state lawmakers are making a push to end a gas utility surcharge that allows companies to raise customer heating bills in order to pay for infrastructure projects.

The surcharge, known as the Qualified Infrastructure Plant (QIP), became law in 2013 after similar legislation was passed for utility giant Commonwealth Edison.

Supporters of Senate Bill 570 and House Bill 3941, which seeks to repeal the surcharge law, include AARP Illinois, the Citizens Utility Board and Illinois Public Interest Research Group. Members of the three groups held a news conference Monday to urge the General Assembly to end the QIP surcharge. They say the law allowed heating bills to skyrocket while lining the pockets of major utilities.

“The General Assembly was told the special ability to raise bills was needed for safety, that spending would be limited and utility bill impacts would be kept low,” said Rep. Joyce Mason, D-Gurnee, chief sponsor of the House bill. “None of these things are true today.”

The utilities claim the surcharge is a necessity to pay for pipe replacement and other work. While everyone agrees old pipes should be replaced, consumer advocates argue the utilities should do it in a responsible way that doesn’t cause hardship for their customers.

Bryan McDaniel, CUB director of governmental affairs, said by law, utilities are already required to keep the system safe and reliable.

“This legislation will not shut down infrastructure spending as the utilities will claim,” McDaniel said. “It will simply transition it to traditional regulatory oversight.”

Before QIP was implemented, utility companies would spend money on their infrastructure and then go before regulators who would approve the spending before the companies could start charging customers.

Now with the surcharge in place, a company can begin collecting costs before having to justify the rate increases to regulators.

The state’s largest gas utility, Nicor, has already replaced its old cast iron pipes, but has raised delivery rates by more than $500 million since that time. That includes this past November when it was granted a $240 million increase, the largest gas hike in Illinois history.

"Since 2014, the Qualified Infrastructure Plant (QIP) has helped Nicor Gas invest over $2.5 billion in infrastructure improvement including replacing approximately 990 miles of natural gas main, 111,250 natural gas service lines and another 187 improvement projects across 100 communities are scheduled for this year," a spokesperson for Nicor responded in a statement late Monday. "These improvements along with Nicor Gas’ storage facility reserves have allowed the company to deliver natural gas safely and effectively to our 2.2 million customers."

“The utilities are now spending money on things like installing new meters and replacing perfectly safe pipes and we’re all getting stuck with the bill,” said Mason.