Two Illinois Commerce Commission administrative law judges issued a recommendation Monday to slash a proposed $314 million Nicor Gas rate increase by more than a third.
The proposed order authorized a downsized $204 million rate increase for Nicor, which pending commission approval, would show up on the gas bills for the utility’s 2.3 million customers in suburban Chicago and northern Illinois beginning in January.
The ICC is expected to issue a final ruling by Nov. 24.
“This is another step in the rate request process, and we are reviewing the proposal from the administrative law judges,” Nicor spokeswoman Jennifer Golz said Tuesday.
Nicor filed in January for the largest gas rate increase in Illinois history, saying it needed to replace aging infrastructure and update technology to serve its customers.
Consumer groups had been seeking deeper cuts in Nicor’s proposed record gas rate hike — the utility’s fifth in eight years — as customers grapple with higher energy costs more broadly.
“We applaud the recommendation to cut Nicor’s proposed rate hike by more than $100 million,” Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, said in a news release Tuesday. “But utility regulators at the Illinois Commerce Commission can do more to limit the impact of Nicor’s fifth rate hike since 2017.”
Nicor, which is owned by Atlanta-based Southern Co., is the largest gas utility in Illinois. The rate hike request includes a 10.35% return on equity for shareholders of Southern Co.
As part of the recommended reduction in the rate increase, the administrative law judges authorized a lower 9.93% return on equity, which would still generate profits of $471 million for the utility, according to the proposed order.
Residential gas bills include both supply and distribution charges. Nicor’s proposed $314 million rate increase would raise the cost of delivering the gas, which accounts for about half the bill.
For typical Chicago-area residential customers, the proposed $314 million increase would add about $7.70 per month to delivery charges, raising the total bill by nearly 9.3%, Golz said.
Meanwhile, customers have been dealing with a spike in energy supply prices — both electricity and natural gas — which utilities do not profit from, but pass through as a usage line item on monthly bills.
Nicor saw its gas supply prices peak this year at 58 cents per therm in April, up 71% over the same month last year. In October, Nicor charged customers 39 cents per therm, still up nearly 40% year-over-year, according to published ICC data.
“We are working to keep bills as low as possible and our monthly per therm gas cost has continued to decrease month over month since April,” Golz said.
By comparison, Peoples Gas, which serves 894,000 customers in Chicago, saw its supply prices peak at 59 cents per therm in May — more than double the same month in 2024. In October, Peoples charged customers 30 cents per therm, a flat year-over-year price, according to ICC data.
Consumer advocates, including PIRG and the Citizens Utility Board, were looking to cut Nicor’s proposed $314 million rate increase in half, citing the one-two punch of higher delivery rates and spiking energy costs for Chicago-area utility customers.
Some ComEd customers, for example, saw a triple-digit increase in their total June electricity bills due to a supply rate increase and high demand during a summer heat wave.
While energy supply prices fluctuate, with 80% of Illinois homes relying on natural gas for heat, consumer advocates want to put a lid on proposed Nicor delivery charges before the rate is set by the ICC next month.
“Now more than ever, consumers are counting on state regulators to alleviate the burden of relentlessly escalating utility costs, because no one should have to choose between keeping the heat on in the winter and putting food on the table,” Sarah Moskowitz, executive director of the Citizens Utility Board, said in a news release.
rchannick@chicagotribune.com
