Nicor Gas’ rate-hike request would be reduced by 63 percent, including a $6 decrease in the monthly customer charge, under a settlement negotiated by Illinois Attorney General Kwame Raoul.
The settlement, which was announced Sept. 9, still requires Illinois Commerce Commission (ICC) approval. Here are some details on its provisions:
- The proposed $220.8 million Nicor rate hike would be cut by $139 million, or 63 percent, to $81.6 million. Nicor’s original rate hike would have meant an increase of roughly $6 a month. With the settlement, the increase would be about $2.21 a month, on average.
- The customer charge, currently $21.30, would be cut by about 30 percent, to $15 a month, beginning Nov. 16. This is a win for consumers, who will now have more control over what they pay and can more easily reap the benefits of energy efficiency.
- The profit rate for shareholders (Return on Equity, or ROE) will be cut to 9.48 percent. Nicor currently pulls in a 9.6 percent ROE and had wanted to increase it to an outrageous 10.35 percent. In the case, CUB argued it should be no more than 9.45 percent.
- Nicor agreed to do a better job of considering alternatives to expensive pipeline replacement, including advanced repair and rehabilitation technologies. This is a small step toward limiting costs on gas infrastructure.
- Nicor agreed to drop its appeal of the last rate case, which ended with the ICC cutting the rate hike by nearly 50 percent.
- While CUB was a party to the settlement, it and other consumer advocates did not sign onto a second agreement negotiated by the Attorney General’s office, under which Nicor will maintain higher capital spending levels and protect union jobs through 2027. (This has raised concerns that it will encourage inflated spending by the utility.)
CUB argued there was enough evidence to justify at least an 80 percent reduction in the rate hike, but the consumer group signed onto the settlement because it was the best way to guarantee a significant cut in the rate hike–including a lower customer charge–and to decrease Nicor’s profit rate for shareholders below what it is currently. With this increase, Nicor has raised delivery charges six times, by about 150 percent, since 2017.
“CUB will never celebrate a rate hike, but this settlement represents a step in the right direction and we believe it’s the best outcome we could have gotten in this case,” CUB Executive Director Sarah Moskowitz said. “But this is nowhere near the end of our battles with Nicor. We fully expect to be back at the ICC–either next year or the year after–battling yet another Nicor rate hike. The gas utilities in this state are out of control, and they need to be held accountable.”
