Gas bills may be rising in Chicago after Nicor files for $321 million rate hike, with Peoples Gas expected to follow

Higher gas bills could be in the pipeline for Chicago-area customers next year after Nicor filed for a $321 million rate increase Tuesday with the Illinois Commerce Commission.

If approved, the rate hike would raise the average residential gas bill by $9.28 per month beginning in January 2024, Nicor spokeswoman Jennifer Golz said Wednesday.

Naperville-based Nicor Gas, which is owned by Atlanta-based Southern Co., has 2.3 million customers in suburban Chicago and across northern Illinois.

In November 2021, the ICC granted Nicor a $240 million rate increase to modernize its distribution, transmission and storage infrastructure. That increase added about $3.70 per month to the typical residential customer bill, Golz said.

Peoples Gas and co-owned North Shore Gas may be seeking a rate increase as well, after submitting a waiver request with the ICC to file for it electronically. The requests are on the ICC public utility meeting agenda for Thursday, which is published on the agency’s website.

David Schwartz, a spokesman for Peoples and North Shore Gas, would not confirm if a rate increase request is in the offing.

“Our waiver request to make an electronic filing is part of the ICC rate review process,” Schwartz said in an email Wednesday. “We will let you know if we make a filing.”

Peoples Gas has about 880,000 customers in Chicago and North Shore Gas has about 164,000 customers in the northern suburbs. Both utilities are owned by Milwaukee-based WEC Energy Group.

If Peoples Gas files for a rate increase, it would be the first such request since 2014, after the utility was granted legislative approval to fund its massive pipeline replacement program and pass costs along to customers for 10 years. Peoples Gas spends about $300 million annually on the program but will need lawmakers to sign off on extending ratepayer funding beyond 2023.

Peoples Gas customers are paying about $15 per month to fund the pipeline replacement program, a line item on the bill that is about $2 higher than last year.

Several watchdog groups are advocating legislators end the built-in surcharge, putting Peoples’ spending under more regulatory scrutiny and forcing the utility to get infrastructure improvements approved through traditional rate cases.

“I do think they’re going to try to extend it,” said Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization. “But instead of having a bunch of revenue tied up into this bill surcharge that might go away, it makes sense for them to move that into their normal rates.”

The ICC has 11 months to review a proposed utility rate case, meaning the earliest Peoples Gas could implement an increase would likely be January 2024 — after the current pipeline replacement rider expires, Scarr said.

rchannick@chicagotribune.com