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Nicor takes first step toward rate hike that could add $9 a month to average bill

Nicor Gas took the first step toward a $321 million rate hike Tuesday, filing for an increase from state regulators that, on average, would cost residential customers just over $9 more on their monthly natural gas bill.

The request, filed with the Illinois Commerce Commission, comes on the heels of a $240 million rate increase Nicor implemented in late 2021. The Naperville-based utility is the largest natural gas distribution company in Illinois, serving more than two million customers and encompassing most of suburban Chicago.

Despite its most recent hike, Nicor said the forecast that served as the basis for those rates didn't take into account current inflation rates or costs for infrastructure improvements to be made in 2023 and 2024.

"Nicor Gas realizes the impact any rate increase can have on customers and does not make this request lightly; however, this rate increase is necessary to run our business due to inflation and rising global impacts that continue to affect our operating and maintenance costs," the company said in a statement.

The rate increase is not expected to come into effect anytime soon.

"This is just the first step of a very lengthy review process, which generally takes around 11 months to complete, if, and when, a docketed proceeding has been initiated by the Commission," commission officials said.

If approved as filed, the average household would experience an increase of about $9.28 per month in its annual natural gas bill, Nicor said.

The potential increase also comes as Peoples Gas, which serves the city of Chicago, prepares to file for its first rate hike in eight years, Crain's Business reported.

The utility added that cost of service is now rising due to ongoing investments "to meet new federal compliance-related regulations and industry best practices that help ensure systemwide reliability while proactively lowering our operational methane and greenhouse gas emissions."

Nicor said the investments include system maintenance such as a line main replacement project, which replaces sections of steel pipeline from 1959, and improvements to its storage system, such as replacing an aging compressor at its Troy Grove storage facility in LaSalle County.

Amid higher natural gas prices as well as a state and nationwide push to transition to more eco-friendly forms of heat, the utility said it is also taking steps to fulfill its goal of reaching net-zero greenhouse gas emissions from its operations by 2050.

"To accomplish this, we are actively working to tighten our system and investing in transformational innovation," Nicor said in an email.

The company is currently looking into renewable natural gas through a pilot program that locates potential production facilities in its service territory.

Renewable natural gas, which is essentially biogas or the product of the decomposition of organic matter, is interchangeable with conventional natural gas.

"The goal of the RGI pilot is to seek opportunities to displace the use of geologic natural gas and reduce the volume of methane released into the atmosphere from waste sources here in Illinois," Nicor said.

• Jenny Whidden is a Report For America corps member covering climate change and the environment for the Daily Herald. To help support her work with a tax-deductible donation, see www.dailyherald.com/rfa.

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