As Nicor customers get ready for the long winter ahead, they may take some comfort in knowing their residential gas delivery costs are only expected to go up by an average of $2.21 per month beginning in January.
That’s because the Illinois Commerce Commission approved a settlement Thursday between Nicor Gas and Illinois Attorney General Kwame Raoul’s office, which reduced the utility’s proposed rate increase from $221 million down to about $82 million.
The $221 million proposal would have raised residential gas rates by about $6 per month beginning in 2027, the utility said.
“We understand that any increase matters, particularly as families and businesses manage rising everyday costs,” Nicor said in a statement Thursday. “We remain focused on managing costs responsibly, connecting customers with available bill assistance and energy-efficiency resources, and making the infrastructure investments needed to serve Northern Illinois safely and reliably.”
Nicor, which is owned by Atlanta-based Southern Co., is the largest gas utility in Illinois, serving 2.3 million customers in suburban Chicago and northern Illinois.
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The initial $221 million rate increase request sought to fund a variety of infrastructure projects, including the replacement of old equipment and 45 miles of distribution pipeline. In addition, Nicor was looking to repair more than 400 miles of transmission pipeline, the utility said.
The attorney general’s office opposed the increase, alleging Nicor overstated its forecast capital spending program and inflated an accounting mechanism to bolster profits.
As part of the settlement last month, Nicor agreed to a reduction in the profit it is allowed to make on its infrastructure investments. Separately, the utility also agreed to protect union jobs through 2027.
While Illinois PIRG was among a number of consumer groups that signed onto the downwardly revised rate agreement with Nicor, it did not support the supplemental agreement between the attorney general’s office and the utility to preserve union jobs next year.
“A settlement is a compromise, so we’re not thrilled about every element, but we are pleased the Commission approved it,” Abe Scarr, director of Illinois PIRG, said in a statement.
In its ruling Thursday, the ICC said agreements similar to the employment stipulation “should not come before the commission” in the future.
Meanwhile, the ICC is expected to rule next month on a proposed $144 million Peoples Gas rate increase, which the utility itself reduced from an initially requested $202 million.
Earlier this month, two ICC administrative law judges issued a proposed order recommending the commission cut the requested Peoples Gas increase down to $66 million.
Owned by Milwaukee-based WEC Energy Group, Peoples Gas serves more than 898,000 customers in Chicago.