Advocates call on regulators to reject natural gas rate increases

[March 29, 2023]  By ANDREW ADAMS
Capitol News Illinois
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CHICAGO – Consumer advocates, environmentalists and Chicago residents gathered in front of the Chicago offices of Peoples Gas this week to call on the Illinois Commerce Commission to reject a proposed rate increase from the gas utility.

Several advocacy groups, including the Citizens Utility Board, Blacks in Green and Illinois PIRG participated in the protest.

The event drew around 100 people, including Valerie Carroll, a resident of West Englewood. In February, 37 percent of residential gas customers of the majority Black neighborhood were more than 30 days late on their bill, according to the company’s filings with the ICC.

“I need the ICC to say no. Don’t raise these prices. Our paychecks are not going up, but our bills are,” Carroll said. “We can’t afford it. The reality of it is we can’t afford it. I have my granddaughters at home and when they go to bed, they have to put on their onesies with socks just so I can manage. Is that fair to them? No. But I can’t do anything about it. I can't afford it.”

Peoples Gas petitioned the ICC to raise gas rates in January. This began a regulatory process in which representatives of the company will make their case to the ICC as to why the rate increase is necessary. Several interest groups have already filed petitions in the case, which is expected to last until late this year.

The proposed increase is the largest in state history and would raise the cost of gas for Chicago customers by $11.83 per month, on average, according to an analysis from the Citizens Utility Board. CUB is an independent nonprofit organization created by the Illinois General Assembly which intervenes in ICC cases on behalf of utility consumers.

This would be the first traditional rate increase for Peoples Gas in nine years, although during that time, other factors have resulted in increases to consumer bills. One of those factors is the “qualified infrastructure plant” charge, an automatic increase to bills that the state approved in 2013. The law allowing Ameren Illinois, Nicor Gas and Peoples Gas to levy QIP charges is scheduled to expire at the end of the year.

Peoples Gas said in a January news release that the increase would not affect a typical customer’s bill due to falling natural gas prices. The release also noted that the increase will help pay for infrastructure improvements, particularly upgrades to the pipes that carry natural gas around the city.

“Many of the pipes are from the 1800s,” Peoples Gas spokesperson David Schwartz said in an email. “Modernization is crucial for safety, for the reliable delivery of energy to keep Chicagoans warm, and to stop leaks that harm the environment.”

The company’s ongoing pipe replacement program, which originated with a federal push for infrastructure upgrades more than a decade ago, is the subject of sharp criticism from watchdog groups. Illinois PIRG Director Abe Scarr said the program has been mismanaged and that it hasn’t reduced risk in proportion to its cost.

“Year after year, Peoples Gas busts its budget and falls woefully short of its pipe replacement goals,” Scarr told the crowd on Monday.

Illinois PIRG and CUB, which oppose the rate increase, have both filed motions to intervene in the ongoing ICC case, meaning they will offer their perspective to regulators and offer testimony supporting their positions.

Downstate rate increases

The request for gas rate increases in Chicago comes alongside similar requests from the state’s largest utilities. Peoples Gas, North Shore Gas, Nicor Gas and Ameren Illinois, which together serve more than 4.2 million gas customers around the state, are all currently seeking rate increases.

Naomi Davis, the founder of Blacks in Green, speaks to a crowd in downtown Chicago at a March 27 protest of Peoples Gas’ proposed rate increase. (Capitol News Illinois photo by Andrew Adams)

These cases were all filed in January and come with similar estimated increases in gas costs. Nicor customers could see a $9.28 monthly increase, North Shore customers could see a $6 monthly increase and Ameren gas customers could see a $6.68 monthly increase, according to CUB.

CUB director David Kolata called this “an unprecedented rate-hike barrage” in early February. He also noted that CUB will fight each of these increases.

In an email to Capitol News Illinois, Ameren Illinois echoed Peoples Gas’ claim that falling gas prices will result in most consumers’ bills not increasing. The company also echoed Peoples Gas’ reasoning for the rate increase, saying that the money will go to infrastructure improvements.

“With global energy challenges and increasingly volatile weather patterns, investments in natural gas infrastructure are needed to maintain a resilient and reliable energy delivery system, meet federal pipeline safety regulations, and prepare for the transition to cleaner, renewable energy technologies,” Ameren spokesperson Tucker Kennedy said in an email.

The legislature’s role

Some advocates and lawmakers think that more consumer protections are needed.

“Now is the time to take action with legislative and regulatory changes,” Blacks in Green founder Naomi Davis told the crowd on Monday.

Davis and other members of her organization were in Springfield last week to advocate for House Bill 2172, which advocates call People’s Utility Rate Relief Act. The bill would “make energy rates more affordable, create stronger protections and improve oversight,” in the words of the bill’s sponsor, Rep. Will Davis, D-Homewood.

Sen. Cristina Pacione-Zayas, D-Chicago, was there on Monday alongside other Democratic Chicago lawmakers including Reps. Will Guzzardi and Kam Buckner.

“This is not just about blocking these rate hikes,” said Pacione-Zayas. “It’s about how we live up to the intent of the Climate and Equitable Jobs Act and move away from fossil fuels into decarbonization.”

When asked if she expected to see any legislative action taken on utilities and affordability, Pacione-Zayas said that heating affordability intersects with, among other things, affordable housing and post-pandemic changes to welfare programs.

“All of this is on the table, and I think a lot of it will come up with budget discussions,” she said.

Although Guzzardi said that he is working with other lawmakers to introduce legislative reforms, he noted that ultimately, utility rates are up to the ICC.

“We created a body to govern these rate hikes and that’s the Illinois Commerce Commission,” he said. “We’ve got some great new appointees in the Commerce Commission so I’m really hoping those folks step up, take their jobs seriously and take a closer look at this rate hike.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to more than 400 newspapers statewide, as well as hundreds of radio and TV stations. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.