Oil & Gas

Proposed $7.9M Peoples Gas rate hike denied by Illinois regulators

A smaller rate hike of $1.6 million was approved, which will lead to a 15-cent monthly increase to the average residential customer, according to Peoples Gas

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A request from Peoples Gas for a rate hike of nearly $8 million was denied by the Illinois Commerce Commission Thursday, according to a press release.

Instead of the requested $7.9 million hike, the commission instead approved an additional rate hike of $1.6 million for emergency work "out of an abundance of caution," according to a statement from the Illinois Public Interest Research Group, who advocated against the additional rate hikes.

According to Peoples Gas, the approved rate hike will result in a 15-cent monthly increase, with the utility claiming the proposed rate hike would result in a 60-cent monthly increase.

The proposed rate increase was in addition to a $303 million rate increase that went into effect in Dec. 2023.

The $303 million increase was a reduction of 25% of the initial request. State regulators are also investigating the company’s pipe replacement strategy, a move that has been criticized by the company.

In addition to opposition from the Illinois PIRG, the rate increase was also opposed by both the city of Chicago and Illinois Attorney General Kwame Raoul, who argued for either a much smaller increase or no increase at all.

The Citizens Utility Board, who also advocated against the decision, released a statement:

"We commend the Illinois Commerce Commission (ICC) for rejecting a six-month onslaught of scare-mongering and misinformation that Peoples Gas and its allies hurled at regulators in the hopes of pressuring them to restore much of the controversial pipeline-replacement program’s 2024 spending. 

With today’s decision, the ICC reaffirmed that utilities should be prohibited from charging customers for expenditures they can’t justify. This is the fundamental principle of public accountability that regulators upheld last year when they instituted a moratorium on investment in Peoples Gas’ System Modernization Program (SMP), an initiative rife with mismanagement and cost overruns,"  the statement read in part.

Peoples Gas criticized the ruling, saying it jeopardized the "safety and reliability" of Chicago's energy system.

The utility company added that they plan to appeal the ICC's ruling.

"The Commission’s decision risks the continued safety and reliability of Chicago’s energy system. The proposal the Commission rejected will harm our future efforts to address critical needs in the system.

Throughout this process we have responded to hundreds of requests for information and provided thousands of pages of data and details. The Commission’s staff — whose job it is to audit utilities and provide technical advice to the Commission — confirmed that Peoples Gas emergency and safety work is necessary to comply with federal pipeline safety requirements and keep Chicago safe. On behalf of our customers we will appeal the Commission’s decision," the statement said.

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