CUB, watchdog groups urge regulators to reject proposed Nicor rate hike
Representatives from the Citizens Utility Board and other citizen advocate groups urged Illinois regulators Wednesday to reject Nicor Gas Company's request for a $308.6 million rate increase.
If approved, Nicor's requested rate hike — its fifth since 2017 — would be the largest gas utility rate hike in the state's history, according to CUB Communications Director Jim Chilsen.
Between 2017 and 2024, the utility raised delivery rates by 114%, Chilsen said. During the same time, Nicor parent company Southern Co. “raked in about $25 billion in profits,” he said during a virtual press conference Wednesday.
The proposed rate hike will increase average gas bills about 9%, which comes to about $7.50 per month or $90 per year, according to Nicor estimates quoted by Chilsen, who described the bid as “rife with excess and fat and more than double what the company can possibly justify.”
Nicor Gas spokeswoman Jennifer Golz said the utility’s distribution rates are among the lowest of any major gas company in Illinois.
“Under the proposed rates, the total bill for an average residential customer continues to remain in line with the Consumer Price Index,” she said.
“For the last 160 years, our customers have counted on us every day to deliver the energy they need and deserve, and we recognize our responsibility to help manage those energy costs … without compromising the safety, reliability, resilience and quality of the service it provides to its customers,” she added.
In addition to replacing aging infrastructure, the company has worked to reduce carbon dioxide emissions and develop “gas and electric solutions that can be faster, less expensive and less risky than an all-electrification approach.”
“We want our customers to understand their bills and why the company is requesting to adjust rates that would allow Nicor Gas to meet those energy demands, especially during extreme weather,” Golz said.
Speaking to reporters Wednesday, CUB general counsel Eric DeBellis urged regulators to “slash this rate hike by more than $150 million in savings to consumers.”
DeBillis said CUB identified more than $111 million “in overcharges buried in Nicor's rate hike request,” which he described as “blatant profit-mongering.”
The proposal would increase the return on equity (shareholder profit rate) to 10.35%, compared to CUB's recommendation to keep it at “a more reasonable 9.45%,” he said.
“That change alone will reduce Nicor's rate hike by $47 million,” DeBellis added.
He also argued for eliminating executive bonuses tied to corporate profit goals.
Abe Scarr, director of the consumer watchdog group Illinois PIRG, said that while Nicor has acknowledged the move toward a clean energy economy, it has also continues to perpetuate the status quo “through ongoing high level spending on the fossil fuel infrastructure.”
Scarr urged the company to consider alternatives that will ensure the transition to cleaner, safer energy.
He also cited capital spending as a major contributor to rate hikes.
“Nicor has been on a spending spree for the last decade,” Scarr said.