Utility Shutoffs for Nonpayment Soar Across Illinois and Chicago Area: Report

In Illinois during 2021, utilities agreed to a ban on shutoffs through March 31 because of disruptions from the COVID-19 pandemic. Many other states also limited shutoffs that year

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Chicago-area electricity and gas suppliers are among national leaders in cutting off customers for nonpayment, with the situation a sign of “utility corruption” in Illinois, according to a report issued Monday by three groups critical of the fossil fuel industry.

The report cited ComEd and Nicor Gas as extreme examples of ordering more shutoffs in 2022 compared with 2021. It said ComEd canceled service for 225,827 accounts through October of last year, up 27% from the same 10 months in the prior year.

Over the same period, Nicor Gas, which serves most Chicago suburbs, stopped service to 24,022 customers, nearly a 38% increase from 2021. Peoples Gas, the Chicago provider, increased shutoffs by 14.7%, to 14,859, said the report, “Powerless in the United States.”

In Illinois during 2021, utilities agreed to a ban on shutoffs through March 31 because of disruptions from the COVID-19 pandemic. Many other states also limited shutoffs that year.

The 2022 increases helped make Illinois the leader in utility shutoffs among the 30 states and Washington, D.C., that disclose that information, the report said. Its authors are staff members with the Energy and Policy Institute, the Center for Biological Diversity and BailoutWatch.

Across the country, utilities are stepping up shutoffs while spending more for executive salaries and shareholder dividends, the report said. It said utilities that were most active in shutoffs from 2020 through October 2022 could have avoided all of them by redirecting just 1% of their dividend outlays.

ComEd was singled out for criticism, with the groups putting it in its “Hall of Shame” for increasing disconnections even as it campaigned for and won rate increases. The utility, a division of Exelon Corp., has paid a $200 million fine to settle charges connected with a corruption case involving former Illinois House Speaker Michael Madigan.

Four people, including former ComEd CEO Anne Pramaggiore, have been charged with trying to bribe Madigan. All have denied wrongdoing.

“The preventable practice of disconnections keeps millions of Americans in poverty and narrows their avenues of escape,” the report said. “By giving utility companies the power to penalize poverty, we license them to perpetuate it.”

Tom Dominguez, a spokesman for ComEd, said the utility has nothing to gain from shutoffs and has increased support for programs that help people pay their bills. He said ComEd’s 2022 shutoffs are now roughly at the pace of 2019, before the pandemic.

Dominguez also issued a statement questioning the credibility of the Energy and Policy Institute. The organization does not disclose its sources of funding, saying only that it is backed by foundations that support environmental causes.

Nicor spokeswoman Jennifer Golz said its own data show its shutoffs increasing at a lower rate than the report cited. She said Nicor, part of utility giant Southern Co., has increased grants for people who need payment help.

A Peoples representative could not be reached.

Peoples is part of WEC Energy Group, which also owns North Shore Gas, serving some northern suburbs. The report said North Shore’s 1,982 cutoffs for the first 10 months of 2022 were up more than 36% from the same period in 2021.

Among states reporting the data, Illinois led the nation with 284,720 electricity shutoffs and 82,496 gas shutoffs during the first 10 months of 2022, the report said, citing records from the Illinois Commerce Commission. The numbers were sharply higher than the same period in the prior year, with downstate utilities adding to the totals.

Last year, ComEd got regulatory approval for a $199 million rate increase. The ICC approved the increase three months after ordering the utility to refund $38 million to consumers for its part in the alleged bribery scheme.

Federal prosecutors have said ComEd routed money, jobs and contracts to Madigan associates to assure the former speaker’s support for a rate-setting system the Legislature adopted in 2011. Critics contend the system has benefited ComEd and hurt customers.

Commenting on the report, David Kolata, executive director of the watchdog group Citizens Utility Board, said a volatile natural-gas market and “rate-hike happy utilities” have made energy less affordable. “Unless we find cheaper, cleaner ways to heat our homes, the conditions will only get more severe for Illinois’ most vulnerable utility customers,” Kolata said.

Authors of the shutoff report noted limitations in its data. They said 20 states don’t disclose statistics for shutoffs due to nonpayment, a group that as of late 2021 includes Florida. They said the lack of transparency hides the extent of the problem.

Where the information is available nationwide, utilities were found to have cut power to 1.5 million households from January through October 2022. The report said electricity disconnections rose 29% during that period, while gas disconnections were up 76%.

“The pandemic years were massively lucrative for corporate owners of private utilities,” the report said. “The 45 companies examined raked in $184.8 billion in profits in 2021, a 71% increase from 2020. Even in 2020, the toughest of the three years analyzed, all but four were profitable.”

Illinois law provides rules that utilities must follow before cutting off service. Companies must follow requirements for advance notice to customers, offer a repayment plan and observe limits on shutoffs during sub-freezing or extremely hot weather.

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