Consumer advocates tell regulators to slash rate hike requests from
Ameren, Nicor
[May 15, 2025]
By Andrew Adams
Natural gas customers in the Chicago suburbs and downstate Illinois are
likely to see an increase in their monthly bills next year, but it’s up
to state regulators to decide how big a hike, if any, to approve.
Nicor Gas, which serves 2.3 million customers in northern and western
Illinois, requested the largest gas rate plan in state history — roughly
equivalent to $7.50 per month for the average residential customer.
Ameren Illinois, which has about 800,000 downstate customers, requested
an increase that translates to between $8 to $10 higher monthly bills
for a typical residential customer.
Regulators at the Illinois Commerce Commission are expected to announce
a decision as to whether to approve or alter the hikes in November. The
new rates would go into effect at the start of 2026.
In the meantime, consumer watchdogs and environmental advocates are
railing against both utilities for their requests, which they argue
should be slashed drastically.
Critiques from consumer groups
The Citizens Utility Board, a consumer watchdog group, filed written
testimony this month in both cases arguing that the requests should be
cut — Nicor’s by about 36% and Ameren’s by about 42%. Other groups, like
the Illinois attorney general’s office, the Environmental Defense Fund
and others argued for additional cuts in their own filings.
Abe Scarr, director of the consumer advocacy group Illinois PIRG, said
the companies are requesting “long-term commitments” in paying for gas
system infrastructure, despite the potential for decreasing demand for
fossil fuels.
“The more expensive their infrastructure investments, the more
opportunity they have to profit,” Scarr said.
Because utility profits are regulated by agencies like the ICC, there is
a financial incentive to invest in infrastructure so that more funds can
be “recovered” from customers — a portion of which then go to
shareholders.
That rate of return is one of the things being litigated in these rate
cases. Both companies requested a bump in their allowed “return on
equity,” which translates to the amount paid to shareholders. In recent
years, the ICC has consistently rejected utilities’ requests for higher
return rates, although they have approved some modest increases.
“You’re asking us to predict what those shares are worth next year? Next
month is gonna be hard,” CUB’s general counsel Eric DeBellis said.
DeBellis said the companies overstepped in other areas of their requests
as well, including costs associated with rate cases and post-employment
benefits as well as an accounting irregularity worth millions of dollars
that Ameren has already admitted was erroneous.
He noted that Nicor included tens of millions of dollars of projects
that were rejected by the ICC in the company’s rate request two years
ago, a move that DeBellis called “galling.”
Environmentalists question future of gas
The companies drew criticism from some environmentalists, who argued in
testimony this month that investing in natural gas infrastructure as the
state — and country — move away from fossil fuels could leave customers
on the hook for the bill for decades.
Curt Stokes, a senior attorney at the Environmental Defense Fund, said
he’s concerned that gas companies are building out new gas
infrastructure in a way that “locks us in and keeps us hooked on fossil
fuels for our energy needs.”
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The Michael A. Bilandic Building in downtown Chicago, shown in May
2024, houses the offices of the Illinois Commerce Commission.
(Capitol News Illinois photo by Andrew Adams)
For Ameren, much of the contention comes from the company’s plan to
upgrade its natural gas system, a plan that company officials say is
required by federal safety rules. But critics point out that Ameren
frequently chooses to totally replace pipes — the most expensive and
most profitable option — instead of cheaper alternatives like testing
them for safety.
But Ameren officials defend the choice as being the only option to
ensure compliance with federal rules.
“The investments we have proposed in our reliability plan will enable us
to meet strict federal pipeline safety requirements, reduce leaks, and
provide reliable and affordable natural gas service for our residential
and business customers,” Brad Kloeppel, Ameren’s senior director of gas
operations, said in a statement. “We evaluate all methods available for
each segment of pipe subject to compliance based on cost and operational
feasibility.”
Meanwhile, advocates have criticized Nicor’s efforts at lessening
greenhouse gas emissions.
The utility requested to make permanent a pilot program called “TotalGreen,”
a voluntary effort that allows customers to pay to offset their carbon
footprint through a mix of “renewable natural gas” and investments in
methane capture and forest conservation.
“They certainly have not demonstrated, and there’s lots of — lots of —
reasons to be skeptical, that there’s any environmental benefit,” Scarr
said.
The EDF, Illinois PIRG and the Environmental Law and Policy Center
argued in a joint filing that the “TotalGreen” program fails to live up
to the state’s clean energy goals.
Among other reasons, the groups’ testimony said it costs more than
$2,400 per person and has only offset the equivalent of 0.0031% of the
company’s yearly carbon footprint.
Jennifer Golz, a Nicor spokesperson, said the program “supports the
state’s broader environmental objectives on the path to a sustainable
future.”
“Nicor Gas supports our parent company, Southern Company Gas, in its
goal to achieve net zero direct greenhouse gas emissions from its
operations by 2050,” Golz said in an email. “We also support reducing
emissions across the natural gas value chain, from gas production to
transmission to end uses.”
TotalGreen is one of several projects outlined in the two rate cases
which use “renewable natural gas,” a term for methane that is captured
from landfills, wastewater treatment plants and farms that would have
otherwise been released into the atmosphere.
Stokes said there were “too many open questions” about renewable natural
gas programs for the EDF to support the initiatives, but he was
optimistic about some of the companies’ other proposals.
“There are good signs in these cases that Nicor and Ameren are looking
to be more innovative,” Stokes said.
He pointed specifically to Nicor’s energy efficiency programs and a
proposal for a pilot program at Ameren which would allow communities to
transition from natural gas to electric all at once as pipes need to be
replaced or retired.
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by the Illinois Press Foundation and the Robert R. McCormick Foundation. |
