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ICC lauded for ‘earthquake in Illinois utility regulation’

Friday, Nov 17, 2023 - Posted by Rich Miller

* ICC press release…

Today, the Illinois Commerce Commission (ICC) disallowed $96.99 million to Nicor Gas’ rate request for its natural gas delivery services in Illinois. The decision is about 30.3 percent lower than Nicor’s initial request for a $320 million increase and approves a 9.51 percent return on equity (ROE), a reduction from Nicor Gas’ current 9.73 percent ROE and the company’s requested 10.35 percent ROE.

The ICC has issued its decision after closely scrutinizing Nicor’s rate case filings and additional materials submitted by the utility, Commission staff, and various interveners over an 11-month legal proceeding. The process aims to ensure the utility receives the necessary funds to provide safe and reliable service to customers and to maintain and replace aging infrastructure at a reasonable cost to ratepayers. In accordance with the Illinois Public Utilities Act, these costs are only recoverable if a utility demonstrates they are reasonable and prudent.

The decision initiates a two-step future of gas proceeding that includes a detailed action plan for the utilities’ future infrastructure investments to evaluate the impacts of Illinois’ decarbonization and electrification goals on the natural gas system.

“As the State embarks on a journey toward a 100 percent clean energy economy, the gas system’s operations will not continue to exist in its current form. Identifying how our gas and electric systems can adapt to meet these goals, and what specific actions should be taken to achieve them, will be an important task for the Commission moving forward,” said ICC Chairman Doug Scott.

The decision also establishes a new low-income discount rate for eligible customers whose incomes are up to 300 percent of the Federal Poverty Level (FPL). The rate will offer a five-75 percent monthly total bill credit for qualifying customers beginning October 1, 2024. In December of last year, the ICC found the implementation of low-income discount rates to be appropriate for Illinois’ electric and natural gas residential customers. As a part of the Commission’s decision, Nicor will submit annual reports documenting cost-reduction from the program.

Customers already enrolled in the state’s Low-Income Home Energy Assistance Program (LIHEAP) will automatically qualify for the newly-established low-income discount rate. Customers not currently eligible for LIHEAP, but whose income falls within 200-300 percent of FPL still qualify for a discount by self-reporting their income eligibility to their utility.

The impact of the rate case decision on individual customers will vary based on customers’ service class and energy usage. The ICC plans to issue an estimated bill impact for the average residential customer once Nicor submits its updated compliance filing with the Commission.

* Tribune

The ICC also approved smaller-than-requested rate increases next year for Peoples Gas, North Shore Gas and Nicor Gas at Thursday’s meeting.

Peoples Gas had requested a record $402 million rate increase. The ICC cut the increase by $101 million, or 25%. […]

The ICC reduced a $17 million rate hike request from North Shore Gas by nearly $6 million, or roughly 34%. North Shore Gas has 164,000 customers in the north suburbs. Both Peoples and North Shore are owned by Milwaukee-based WEC Energy Group.

A $320 million rate increase request from Nicor Gas was cut by nearly $97 million, or about 30%. Naperville-based Nicor has 2.3 million customers in suburban Chicago and across northern Illinois.

* Some react from Capitol News Illinois

“This was an earthquake in Illinois utility regulation,” Abe Scarr, director of consumer advocacy group Illinois PIRG told Capitol News Illinois after the Thursday meeting. […]

“My initial reaction is that I’m concerned,” Matthew Tomc, who oversees regulatory affairs for Ameren Illinois, told Capitol News Illinois.

Tomc said that once Ameren staff fully reviews the ICC decision, they will consider requesting a rehearing to challenge the ICC’s conclusions.

Other companies involved in the cases indicated they were reviewing the decisions.

“Natural gas remains the most affordable energy source for winter-residential heating and is the main fuel source used by manufacturers in Illinois,” Nicor spokesperson Jennifer Golz said in a statement. “Nicor Gas provides an affordable energy source, which is more important now than ever with families facing rising costs for everything. resources as an energy.”

* Sun-Times

Staffers for the commission, which has the final say on utility prices, recommended last month that the panel cut the hike to $350 million, or roughly $10 more per month for each of the 878,000 Chicagoans whose homes are fueled by Peoples Gas.

Though the commission doesn’t typically stray far from staff recommendations, its final ruling fell at about $301 million. […]

Peoples Gas spokesman David Schwartz didn’t address the commission’s criticism of the pipe program, but said in an email that the utility would “fully review the final order to determine its impact on our customers and operations.

“We look forward to actively participating in future proceedings and demonstrating how our energy delivery system is critical to Chicago’s clean energy future,” Schwartz said. “We are pleased the commission shares our concern about safety.”

* NRDC…

“Today’s decision marks critical progress in the fight for a cleaner, more affordable energy future. We applaud the ICC for hearing community concerns. And we also know there’s still a long road ahead for environmental justice communities like mine, where the cost of natural gas goes beyond just unaffordable rates,” says Cheryl Johnson, Executive Director of People for Community Recovery. “Across Chicago’s south and west sides, legacy contamination and poor outdoor air quality have contributed to disproportionate rates of respiratory illness. Gas stoves are making those worse. We’re glad to see the ICC pushing pause on future gas infrastructure investments and we hope Mayor Johnson and the Chicago city council take an important next step by supporting policies that transition homes and buildings away from dirty, expensive natural gas.”

This decision comes at a time where Illinoians are struggling to pay their bills and as advocates call for a transition away from the gas system to meet our state climate goals. The ICC’s determination in the gas rate case provides some concrete steps in achieving those objectives, according to advocates.

* Illinois Clean Jobs Coalition…

The days of the Illinois Commerce Commission (ICC) rubber-stamping rate hikes for Peoples Gas as they enjoy year-after-year of record profits appear to be over. There’s a new sheriff in town, and we applaud the ICC for significantly reducing the record-setting, exorbitant Peoples Gas $402 million rate hike request.

Make no mistake, this rate hike is still onerous, especially for low-income customers on Chicago’s South and West sides where up to 48% of customers are already behind on their bills and accumulating late fees, which Peoples Gas concedes drives their profits.

With Nicor, North Shore, and Ameren also enacting gas rate hikes, it’s time to begin a managed transition away from dirty, expensive gas to more affordable clean energy solutions. We are glad to see the ICC will begin planning for a future beyond gas by opening a future of heat proceeding.

There is still more to do. We are encouraged that Mayor Johnson is committed to addressing building decarbonization in Chicago and we look forward to the state taking the lead on clean heat legislation in the spring legislative session.

Isabel Miller contributed to this post.

       

2 Comments
  1. - Philly - Friday, Nov 17, 23 @ 2:39 pm:

    Good to see People’s Gas get a well deserved kick in the teeth. Their pipe replacement project has been a nightmare.

    Though, the building decarbonization push is gonna be tough on the downtown Chicago real estate market. Not sure this is the right time to add a new layer of costs. On the other hand, the fact all those buildings are half empty has to reduce fuel consumption.


  2. - Anyone Remember - Friday, Nov 17, 23 @ 2:43 pm:

    “Today’s decision marks critical progress in the fight for a cleaner, more affordable energy future.”

    Perhaps it is also the end of the ICC being utilities’ lap dog.


Sorry, comments for this post are now closed.


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