Residents, activists ask state regulators to reject utilities’ rate increases

[August 05, 2023]  By ANDREW ADAMS
Capitol News Illinois
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Members of the public railed against potential increases to the price of natural gas and electricity at two recent public hearings before a state regulatory body that has the authority to limit those rate hikes.

The Illinois Commerce Commission is considering several rate hikes, including two sought by the utilities Peoples Gas and Ameren Illinois, who say they are needed to fund infrastructure improvements.

Activists and residents in the utilities’ service territories, however, accused the companies of corporate greed and of disregarding the needs of the poor. Environmental advocates also shared concerns about the effects of natural gas on public health and the climate.

Representatives of Peoples Gas outlined their request at an ICC hearing held at a University of Illinois Chicago auditorium on Aug. 1. Their request, if allowed, would result in an approximate monthly increase of $11.83 for residential gas prices. They also noted that they expect the market rate for gas to decrease, which could result in customers’ bills remaining mostly stable next year.

The ICC has the authority to accept, reject or modify the amount of the increase and the other details included in the request, like how the utility plans to spend its money and the utility’s profit rate.

“The primary driver of our rate request... is the investments we’re making in our system,” Peoples Gas President Torrence Hinton said Tuesday.

The hearing, which drew about 100 people, came about two weeks after the ICC hosted a similar hearing in Decatur on a proposed electric rate increase from Ameren. Both hearings were requested by AARP Illinois, a consumer advocacy organization that represents people over 50.

Dorian Williams, one of dozens of people who spoke against Peoples Gas’ requested increase Tuesday, said the question wasn’t about whether to invest in the infrastructure, but who would pay for it.

“It’s my understanding that when a company maintains a product – in this case not the gas itself, but the infrastructure delivering that product – it is their task to maintain it,” Williams said. “So if the infrastructure has been degrading and hasn’t been maintained, if people haven’t been employed at levels to keep it maintained, wouldn’t that be considered negligence on behalf of the company?”

Others at the hearing asked the commission to consider the affordability implications of granting the rate increase. Scott Onqué is the pastor at St. Luke Missionary Baptist Church on Chicago’s South Side and the policy director for Faith in Place, an environmental advocacy organization.

“Why spend money on the backs of the least to build an infrastructure that is dated and realistically at the end of its life,” Onqué told regulators. “I’m also alarmed that you have casually announced that this is just a $12 increase. This is not affordable for folks like me. This could be the difference between eating or getting to work that month.”

Peoples Gas has received criticism for its higher-than-average number of customers who are in debt to the company. In recent months, as many as one in five Peoples Gas customers have been more than a month behind on their bills.

Peoples Gas defended its record on affordability by pointing to its support for government- and company-funded assistance programs.

“For our customers with low incomes several forms of financial assistance are available, including a fund to which we recently donated $5 million,” Peoples Gas spokesman David Schwartz said in an email statement. “Our team members were at the public meeting to provide in-person help to anyone looking to access the heating assistance funds.”

Peoples Gas has proposed a lowered rate for low-income households, something Schwartz noted “would provide help to many more people.” The new scheme is the result of the Climate and Equitable Jobs Act, which required the ICC to study the best way to implement cost-saving measures for low-income utility customers. In their report on low-income utility rates, the ICC requested that large utilities propose a system for charging low-income customers less than more wealthy customers.

Peoples Gas included its proposal to this effect in its current rate case, but consumer advocates from the National Consumer Law Center said the company’s proposal didn’t go far enough and have advocated for a different rate design scheme as part of their arguments in the case.

Environmentalists also asked the ICC to reject parts of Peoples Gas’ request, pointing out the environmental impacts of continued investment in natural gas. Natural Resources Defense Council advocate J.C. Kibbey said that the effects of climate change have been particularly visible in recent weeks, with Chicago seeing dangerous air quality due to wildfire smoke billowing down from Canada. Kibbey also pointed out that last month was among the hottest in recorded history.

“I know the commission can’t solve all these problems today, but these incredible harms should make us even more skeptical about the record-breaking spending that Peoples Gas wants us to pay for and it can help protect us from unwise spending and higher gas bills,” Kibbey said Tuesday.

Representatives of the Sierra Club and the People for Community Recovery also spoke at the hearing.

Schwartz noted in an email that Peoples Gas’ investments and research into things like “renewable natural gas” and hydrogen technology have reduced leaks in old pipelines and that since 2017, the company has reduced methane emissions by more than 1,300 metric tons.

While they were in the minority, some offered comments in support of Peoples Gas’ requested increase. Donato Iocco, a Peoples Gas employee and vice president of Utility Workers Union of America Local 18007, noted that the increase would help continue the company’s pipeline replacement program.

Representatives of Peoples Gas listen to AARP state director Philippe Largent, who requested public hearings to discuss the utility’s proposed rate increase that is pending before the Illinois Commerce Commission. Peoples Gas officials pictured from left to right: Tom Aridas, director of regulatory policy; Torrence Hinton, Peoples Gas’ president; and Polly Eldringhoff, the company’s vice president for operational performance and compliance. (Capitol News Illinois photo by Andrew Adams)

That replacement program had previously, for about a decade, been funded through the state’s Qualified Infrastructure Plant program. Through that program, gas utilities recouped their costs on those projects through a formula-based process that allowed them to collect – and routinely increase – a customer fee without having to go through an 11-month rate case.

Now, with the QIP program set to expire, Peoples Gas is requesting funding to continue that program through the standard rate case process.

“I’ve been working on mains where it actually fell apart in my hand – caused a huge gas leak that I had to respond to, me and my crew,” Iocco said.

Decatur-area residents speak out
Ameren Illinois – an electric and gas utility serving downstate customers – has two ongoing rate cases before the ICC. It is seeking an increase on electric rates that could result in an increase of consumer bills as high as $25 per month by 2027. The company is also seeking a rate increase for their gas utility services that would increase customer bills by around $5 or $6 per month starting in January.

A July 19 hearing held by the ICC to discuss the electric case drew about 50 people to the Decatur Civic Center, including Rep. Dan Caulkins, R-Decatur, several members of the Decatur city council and people like Richard Peterson, who learned about the hearing on the news.

“I don’t have the statistics. I don’t have the numbers, but I do have the experience and the things that I am experiencing from these high bills and inflation,” Peterson told regulators.

Peterson said he and his wife have struggled since he stopped receiving disability checks.

“It’s very hard. So if you all could just take into consideration when you do your briefs and make your arguments, that people’s lives are in the balance,” Peterson said.

Other speakers at the event noted that Decatur has a higher poverty rate than other similarly sized cities. Decatur City Council member David Horn said the proposed increases could force some in his community to make difficult decisions.

“This has the potential to do significant damage as people have to decide whether they’re going to pay for food, whether they’re going to pay for energy and whether they’re going to pay for medicine,” Horn said.

Others accused companies like Ameren of prioritizing corporate profits over the well-being of their customers.

“I really wonder if Ameren and the other electric providers in this state are really trying to get rich off us,” Debra Sansom, a Decatur resident, said. “If they are, well, just remember, none of us are being fooled by any of this.”

The company, in a news release distributed before the event, said the rate increase will support the long-term goals. Safety, resilience, customer experience and supporting the state’s clean energy transition were listed as the “strategic priorities” of the plan.

In a statement after the hearing, Matthew Tomc, an Ameren official who oversees regulatory policy, said that recent increases in energy prices were largely due to power supply prices, which are outside of Ameren’s control.

“That's why our delivery service proposal is about strengthening the energy grid to improve reliability and make smart investments to get as clean as we can as fast as we can without compromising on affordability,” Tomc said. “Ultimately, a more reliable grid with fewer outages saves everyone money.”

Questions about electrification

Ameren Illinois is also seeking a gas rate increase that has faced criticism from consumer advocates and been questioned by members of the ICC.

In a May filing as part of the monthslong rate case, the five commissioners of the ICC, in an unusual move, directly asked Ameren about the impending effect of “electrification” – the trend toward higher use of electric heating, cooking and transportation.

The company said, among other things, that it was in the “early stage of further examining the role that the natural gas system will play in a decarbonizing world.”

A coalition of public interest organizations, including Illinois PIRG and the NRDC among others, took issue with this characterization, saying the company’s own studies cast doubt on the need for increased infrastructure spending.

“In all of the gas rate cases, there's a fundamental challenge because the companies are operating on status quo assumptions. They’re trying to spend as much money as possible,” Illinois PIRG Director Abe Scarr told Capitol News Illinois.

Scarr later noted that Ameren’s studies show that “no matter what, we’re going to use less gas.”

In a July filing responding to the public interest organizations, Tomc said that even in an electrifying industry, infrastructure spending is still required.

“No one at (Ameren Illinois) is arguing for the retention of the status quo – we agree that the business is changing and needs to change as we transition into a clean energy economy,” Tomc wrote. “I do not agree that we simply reduce investment.”

Tomc said in a statement to Capitol News Illinois that Ameren supports beneficial electrification and that the company “has a responsibility to meet the energy needs of our customers, as well as our safety and compliance obligations.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.