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Is ICC refund sign of a tougher stance toward Peoples Gas?

The Illinois Commerce Commission (ICC) has ordered a $15.4 million refund for Peoples Gas customers, a vote that may signal a tougher stance toward the utility whose rampant spending has sparked a heating-affordability crisis in Chicago.

The refund, ordered on May 18, was connected to a decision by Peoples Gas in 2017 to halt disconnections while installing a new billing system. The ICC ruled that the move led to an excessive rise in bad-debt cost. If a utility can’t collect past-due debt from customers, state law allows them to eventually pass those long-term “uncollectibles” costs onto all customers in the form of a surcharge. But the ICC reviews these costs to make sure the utilities did everything possible to keep that debt under control.

In this case, the ICC voted unanimously that Peoples Gas had to refund $15.4 million of the uncollectibles recovery costs it had gotten from customers in 2018. The vote in favor of the refund actually went against the recommendation of the ICC staff and an ICC administrative law judge. The amount is set to be refunded over nine months beginning in September, but the issue could end up before the Illinois Appeals Court.

Still, the vote may be a signal that new commissioners recently appointed by Gov. J.B. Pritzker are ready to take a tougher, pro-consumer stance when dealing with Peoples Gas. As part of the utility’s record $402 million rate-hike request, the ICC, in an interesting development, pushed Peoples Gas to answer more questions about its troubled pipeline-replacement program. (In a recent news release with Illinois PIRG, CUB criticized the company for not answering the ICC’s questions.)

Reporting on the ICC refund vote, Crain’s Chicago Business wrote that “the surprisingly harsh ruling signals that commissioners are losing patience with Peoples. Chicagoans’ heating bills have been rising relentlessly for years, in large part due to the costs of Peoples’ multibillion-dollar (pipeline-replacement) program to update all of Chicago’s gas pipes. More than one-fifth of residential customers are over 30 days behind on their gas bills, according to Peoples’ filings with the ICC.”

In March, Gov. J.B. Pritzker announced three new members of the ICC: Chairman Doug Scott, Conrad Reddick and Stacey Paradis.

Scott, a former legislator and Mayor of Rockford, has already served as ICC chair once before. He was selected by Gov. Pat Quinn to that post from 2011 to 2015. During that time, ComEd didn’t like the way Scott interpreted the 2011 formula rate law, and the utility giant actually got legislation passed that adjusted the formula rate to make it even more favorable to ComEd and also changed ICC decisions to give the utility bigger rate hikes.

Reddick is a former energy attorney with the City of Chicago who has worked with CUB in the past to fight rate hikes. Paradis is the former executive director of the Midwest Energy Efficiency Alliance.

Scott will take the helm in mid-June. Reddick and Paradis are already on the commission, and participated in the vote for the Peoples Gas rate hike.