Chicagoans paid a 67 percent premium for heat last winter

By Steve Daniels, Crain’s Chicago Business. May 21, 2019

The average Chicago household shelled out $324 more than the average suburban home served by Nicor Gas to keep warm this past winter.

It was the second straight winter that customers of Peoples Gas, the utility for the city, paid a hefty premium for heat. The difference was 67 percent, a slight improvement from the 80 percent margin in the winter of 2017-18.

This was despite the fact that the average suburban household, with a larger home, consumed 6 percent more gas than the average Chicago residence in the five months from November to March, according to data provided by both Peoples and Nicor.

For the winter, the average Chicago household paid a little over $806, or more than $161 per month, for heat. The average suburban residence in Nicor’s service territory paid nearly $482, or just over $96 per month. Both totals were higher than the previous winter’s.

Rapidly rising costs in Chicago, due to unprecedented capital spending by Peoples as it replaces aging gas mains beneath the streets, have become an issue in Chicago’s City Council and in Springfield. What set off alarms in the city was news last year that the difference in heating costs between Chicagoans and suburbanites was 80 percent.

Though marginally lower, the 67 percent difference this past season is well above differences in the past. Chicagoans for years have paid more for gas than suburbanites, since it’s costlier to maintain an urban system and Peoples’ customer base hasn’t grown. But the gap as recently as six years ago was 35 percent.

Nicor, too, gained approval from the state in early 2018 for a $93.5 million rate hike, which was reflected in the costs customers paid last winter. Another $180 million rate hike is pending before the Illinois Commerce Commission, which must rule by October.

A resolution pending before the City Council calls on Gov. J.B. Pritzker and state regulators to “restore necessary oversight of this troubled program, and take adequate action to protect Peoples Gas customers and the public interest.” The resolution, sponsored by Ald. George Cardenas, 12th, was approved in committee and could be on the docket at the council’s next meeting, May 29.

But aldermen are looking for guidance from new Mayor Lori Lightfoot, who has yet to take a public position on the resolution or the general issue of Peoples Gas’ spending and Chicago heating bills.

Legislation in the state House to stop Peoples from imposing ever-increasing monthly surcharges on gas bills to help finance its infrastructure spending has yet to get a hearing, thanks in large part to opposition from private-sector unions that benefit from the work.

To read the full Crain’s story, click here.