ICC RULINGS REDUCE RECORD RATE-HIKE PROPOSALS; HALT CONTROVERSIAL PIPE-REPLACEMENT PROGRAM, AS REGULATORS DRAW LINE ON UTILITY EXCESS
According to CUB, the rulings could signal the end of “business as usual” for People Gas, Nicor, American and North Shore Gas
CHICAGO, November 17, 2023 /PRNewswire/ — In a comprehensive denial from four different utilities, Illinois Regulators have sharply restricted planned record price increases for more than 4 million gas customers across the state while blocking most spending on a controversial pipe replacement program that has created a heating affordability crisis for consumers in recent years.
Thursday’s decisions by the Illinois Commerce Commission (ICC) will continue to impose a rate increase on customers of Peoples Gas, Nicor Gas, Ameren Illinois and North Shore Gas, putting even more strain on already struggling families – a pattern that that consumer advocates have declared determined to suppress in the coming years. Still, the decisions significantly limited the extent of tariff increases that utilities threatened to impose on consumers and, overall, signaled that the regulatory climate in Illinois could shift decisively towards stronger consumer protection.
In each of the cases, the ICC’s rate increase reduction exceeded the amount recommended by the agency’s administrative law judges – sometimes by many times. Overall, the tariff increases were reduced by approx 240 million dollars as a result of the ICC’s actions.
“Rate increases are never a cause for celebration and we are dismayed that gas customers’ bills will continue to rise.” Illinois – but we are grateful that the Illinois Commerce Commission has shown real determination to stop the state gas utilities’ reckless profiteering in a way we haven’t seen in a long time,” CUB CEO said Sarah Moskowitz. “We hope this ruling sends a signal to state utilities that the days of business as usual are coming to an end.”
The net impact of the rulings on the four utilities is as follows:
- Peoples Gas: The ICC shrank the utility’s record-breaking performance 404 million dollars Tariff increase request from 101 million dollarshalving the estimated increase in customer bills $11.83 monthly up to approx $6 monthly. They also cut profits to the company’s shareholders below expectations and prohibited spending on the expensive pipe replacement program pending further review.
- Nicor Gas: The ICC has cut utilities 320 million dollars Interest rate increase proposal from 97 million dollars and reduced the profits of the company’s shareholders many times over.
- Ameren: In its press release, the ICC said it had conducted a purge 36 million dollars from a suggestion $71.57 million Increase in interest rates, a reduction of around 50 percent, while curbing the profits generated by the company’s shareholders.
- North Shore Gas: The ICC reduced the company’s costs $16.59 million Interest rate increase proposal from $5.57 million.
In recent years, Peoples Gas, Nicor and Ameren have boosted their profits by benefiting from a controversial mechanism that allowed them to bill consumers directly for the money they poured into controversial pipe replacement programs. In particular, Peoples Gas’s non-governmental parent company, WEC Energy Group, said the utility’s System Modernization Program (SMP) has been a key profit driver, helping Peoples post record profits for six consecutive years. On Thursday, that spending spree came to an abrupt halt after the ICC imposed an SMP moratorium for 2024 pending a full regulatory review of the way Peoples Gas is managing the program.
On Thursday, the ICC also said:
- Introduction of a new discount rate for low-income earners, starting with October 2024, for gas customers whose income is up to 300 percent of the federal poverty level. Customers who are already enrolled in the Low Income Home Energy Assistance Program (LIHEAP) are automatically eligible for this plan.
- Initiate a “Future of Gas” process that requires utilities to account for the future of their infrastructure as market trends move customers from gas to electricity for heating and cooking and government climate goals favor clean energy.
The Citizens Utility Board (CUB) is Illinois’ leading nonprofit utility watchdog group. CUB was created by the Illinois Legislature in 1984 to represent the interests of residential and small business customers. Since then, CUB has more than saved consumers 20 billion dollars by helping to prevent rate increases and ensure refunds. For more information, call CUB’s consumer hotline at 1-800-669-5556 or visit CUB’s award-winning website, www.CitizensUtilityBoard.org.
SOURCE Citizens Utility Board