CHICAGO — The Illinois Commerce Commission Wednesday sharply cut rate increases proposed by Nicor Gas and Ameren Illinois, slowing the speed of rising energy bills for customers in much of the state.
Instead of approving the full $314 million requested by Nicor and $129 million requested by Ameren, the ICC cut 47% and 43% from the requests, respectively. As a result, the ICC approved a rate increase of $168 million for Nicor and $73 million for Ameren Illinois.
In a news release after the ruling in Chicago, ICC Chairman Doug Scott said the decision was made after careful review to approve only “necessary and justified” projects while striking “excess” spending. “
The ICC’s responsibility is to balance the interests of Illinois’ utilities and their customers,” Scott said in the release. “We recognize that any decision impacting Illinoisians’ bills is not a small one.” Nicor, the largest gas utility in the state, serves 2.3 million customers in northern Illinois and the Chicago suburbs. In January,
Nicor originally requested a $309 million rate increase that was estimated by the company to raise typical residential bills by about $7.50 per month, or about 9%. At the time, the request was the largest in state history before it was amended up to the $314 million amount.
In a statement released after Wednesday’s decision, Nicor estimated that typical residential customers would see an increase of less than $4.25 monthly, or less than 5% annually. Ameren, which provides natural gas delivery to approximately 816,000 customers in central and southern Illinois, filed in January for a $134 million rate increase that a spokesperson said would increase typical residential bills by about $9.09 per month, an 11.9% increase.
Ameren spokesperson Ellie Leonard said in an email to Capitol News Illinois that Ameren was still reviewing the ICC’s order and running calculations to determine the rate impact to consumers.
Infrastructure upgrades, repairs
The companies said the increase was needed to fund replacements or retirements of aging infrastructure for gas transmission lines and upgrades to gas storage facilities. “As we enter the winter season, the safety and vitality of our 800,000 residential, public sector and business customers depends on our ability to deliver natural gas on the coldest of days without interruption,” Brad Kloeppel, Ameren gas operations and technical services senior director, said in a statement.
The Ameren statement also touted use of underground storage facilities which allow Ameren to purchase gas in the summer when prices are typically lower and deliver it to customers at a stable price during the winter heating season.
But consumer advocates say all the upgrades are not necessary, or at least not now. Abe Scarr, director of the Illinois Policy Interest Research Group, or Illinois PIRG, said Nicor has a system that operates safely and well overall.
Investing in major infrastructure updates now, he said, does not necessarily make sense for consumers. “It makes a big difference if you invest in a new pipeline in 2020 versus 2025, and it makes a big impact on consumers and consumer rates,” Scarr said. “So, it’s not only a question of ‘Is this investment reasonable or prudent at all?’ It’s also, ‘Does it need to be made now?’”
While consumer and environmental advocates applauded the ICC’s decision to minimize rate increases, some said any amount was still too high after repeated steep rate increases over the past decade.
According to Illinois PIRG, this is the fifth increase for Nicor since 2017 and the fourth for Ameren since 2018. “With this increase, Nicor’s rates will have risen by 137% since 2017 and Ameren’s by 70% since 2018,” Scarr said in a statement.
The Citizens Utility Board, a nonprofit Illinois utility watchdog group, contrasted the costs for consumers with the utilities’ growing profits over the same periods. “It’s beyond troubling that a corporation getting so fat on its own prosperity continues to demand ever greater financial sacrifices from its customers,” CUB Director of Communications Jim Chilsen said of Nicor in a statement. He released a similar statement regarding Ameren.
In recent years, however, the ICC has proven more willing to diminish rate requests. In November 2023, it slashed rate increase requests by Ameren, Nicor and two other Chicago-area gas utilities by 25-50%. The following month, it rejected a pair of grid plans from electric utilities Commonwealth Edison and Ameren Illinois citing significant shortcomings and transparency concerns.
Read more: Advocates hail regulatory ‘earthquake’ as state slashes requested gas rate increases | State regulators once again flex muscle in rejecting utilities’ grid plans, lessening rate hikes
Meeting clean energy goals
While advocates had mixed responses to the rate case decisions, they found other items to celebrate in the ICC’s nearly 400-page rulings. The ICC discontinued a Nicor pilot program called TotalGreen, which had offered customers the option to pay a premium for carbon offsets and “renewable natural gas” credits.
Nicor had sought to make the program permanent. Of Nicor’s 2.3 million customers, only 238 had enrolled in TotalGreen after three years of operation, according to testimony submitted by the Environmental Law & Policy Center, a Midwest-focused environmental legal advocacy organization.
The ELPC’s analysis found that Nicor spent $2,429 per customer for a program with less than 0.01% customer participation. While Nicor has not proposed charging customers to cover the cost of that program, Scarr said there are more efficient ways to meet decarbonization goals. He pointed to Nicor’s energy efficiency program.
“That (energy efficiency program) has saved way more emissions than this TotalGreen program by reducing energy use in gas consumption in the first place by making homes more efficient,” Scarr said. “That is a much better value proposition for Nicor customers.”
The ICC also rejected a proposal by Ameren to capture biomethane gas released as organic material such as livestock manure, food waste and sewage break down. Ameren sought to capture that gas and refine it into pipeline-quality gas to be used as an alternative energy source, reducing the amount of unburned methane gas going into the atmosphere.
However, the ICC found that Ameren did not prove the project would reduce carbon emissions in a cost-effective way. Environmental advocates applauded the Commission’s rejection of what Scarr called “false solutions.” “
The Commission’s order makes meaningful progress on energy affordability and climate progress,” Curt Stokes, senior attorney at the Environmental Defense Fund said in a statement. “Just as importantly, it set strong guardrails that push utilities to pursue cleaner, more affordable alternatives instead of doubling down on yesterday’s gas infrastructure.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation. This article first appeared on Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
