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ICC administrative law judge recommends largest Peoples Gas rate hike in Illinois history

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Illinois

An administrative law judge has recommended that state regulators approve a smaller rate increase for Peoples Gas than the utility asked for — but the increase would still add up to the biggest hike customers have ever seen in Illinois.

The proposed order filed Friday by Glennon Dolan, an administrative law judge for the Illinois Commerce Commission, recommended the panel vote to approve rate increases totaling about $350 million for Peoples Gas, which is seeking a record-high increase of $402 million.

Consumer advocates want to see the proposed hike slashed below $290 million, which would still top the state’s previous all-time high increase of $240 million approved for Nicor in 2021. […]

A $402 million increase would raise the average monthly residential bill by about $11.83 starting next year, a cost Peoples Gas says it expects to be offset by falling natural gas prices.

The proposed order’s $350 million increase would come out to an extra $10 per month.

While the commission has often followed proposed orders from its administrative law judges, Sarah Moskowitz, executive director of the Citizens Utility Board, said she’s not sure what to expect from the panel this year. Gov. J.B. Pritzker has appointed three new members since March, including chairman Doug Scott.

The draft decision is here.

* Illinois PIRG…

The newly constituted [ICC] has demonstrated on multiple occasions this year that it is prepared to take a more proactive, pro-consumer approach, ordering Peoples Gas to issue a $15 million refund to its customers in May and rejecting $31 million of infrastructure spending by suburban utility Nicor Gas in June. In both instances, the Commission overruled the judge’s Proposed Order.

The rate hike comes as the “QIP” law that has fueled large gas utility rate increases and shielded Peoples Gas from accountability expires at the end of 2023.

Among many other issues being litigated in the case, the Proposed Order:

• Does nothing to immediately address the failing Peoples Gas pipe replacement program, the budget for which has ballooned from up to $2 billion to $11 billion. Consumer and environmental advocates, along with the Office of the Attorney General, are calling on the Commission to enact immediate reforms, while also launching an in-depth investigation of the troubled program. Instead, the Proposed Order would require Commission staff to draft a report with recommendations within 6 months.
• Does nothing to rein in unnecessary and wasteful Peoples Gas spending going forward — the very spending that has led to this historic rate hike. Consumer and environmental advocates, along with the Office of the Attorney General and the City of Chicago, proposed a number of policies that would bring Peoples Gas spending under more scrutiny going forward. Instead of considering those specific policy proposals, the Proposed Order postpones consideration of them until an upcoming “future of gas” proceeding.
• Rejects almost all of the proposals made by the Office of the Attorney General to disallow tens of millions of dollars of unjustified Peoples Gas spending.

In more positive outcomes for consumers, the Proposed Order adopts a slightly lower profit rate than that proposed by Peoples Gas. The slightly lower profit rate is the primary reason the Proposed Order drops the rate hike from just over $400 million to $350 million. The Proposed Order also rejects the utility’s proposal to raise its fixed monthly charge to about $45 per customer. Instead, the order maintains the current fixed monthly charge of about $31, despite arguments from many parties that it should be even lower. High fixed charges discourage energy efficiency and conservation and increase affordability burdens.

Discuss.

posted by Rich Miller
Wednesday, Oct 11, 23 @ 10:48 am

Comments

It would be great to see a state program to incentivize a conversion for residential heating to using heat pumps.

There is no need to immediately remove existing gas furnaces, as a heat pump can simply be added on to a gas furnace much like an air conditioner already is.

As heat pump efficiency continues to improve, and gas prices continue to increase, it will make more and more sense financially as well as environmentally to make the switch.

Comment by TheInvisibleMan Wednesday, Oct 11, 23 @ 10:59 am
It’s crazy to me that Peoples’ gas is able to sponsor the botanical gardens, obviously freedom of association but seems to be two entities inherently at odds with one another.

Comment by Lake Villa Township Dem PC Wednesday, Oct 11, 23 @ 11:57 am
- the failing Peoples Gas pipe replacement program, the budget for which has ballooned from up to $2 billion to $11 billion. -

The mismanagement of this program has been just short of criminal, and possibly criminal. Before PGL gets an extra dime they should have to demonstrate some level of competence.

Comment by Excitable Boy Wednesday, Oct 11, 23 @ 12:08 pm
The big question is - to what extent is the ICC moveable? People are really hurting when it comes to necessary monthly expenses. The public and legislators should be paying more attention to this.

Comment by The Young Gov Wednesday, Oct 11, 23 @ 12:49 pm
I’m actually curious about the process on these hearings. I’ve looked into it a little but, but usually I go to the comments section to learn some new things. Anyone actually seem these hearings in action?

Comment by Just Another Anon Wednesday, Oct 11, 23 @ 3:23 pm
Where is Pat Quinn when you need him?

Comment by Cantankerous Cal Wednesday, Oct 11, 23 @ 3:25 pm
@Just Another Anon - This process is no different than any other administrative hearing process. The ALJ’s job, like any judge’s job, is to hear the evidence, review the law, and apply the law to the evidence. There were a whole lot of parties presenting evidence and argument at the hearing (I’ve skimmed through the proposed order). The judge went through all the evidence and arguments thoroughly and came to the conclusions based upon everything that was presented. Now it’s up to the Commissioners to decide if they agree with the conclusions of the ALJ. As can be seen in the arguments, there is always different ways to interpret laws, and so the ICC may well go another way. But the ALJs tend to have a whole lot more expertise in this area than the commissioners, and therefore, they will often just adopt the ALJ’s proposed order. Either way, the losing parties can and will appeal to the circuit court on administrative review. And then it will be up to the courts.

Comment by Shevek Wednesday, Oct 11, 23 @ 5:11 pm