True winter conditions have arrived in the Chicago area, so the region’s furnaces are working harder than they have since, well, last winter.
The heating bills those living in much of suburban Chicagoland will get in a month or so from Nicor will engender much grumbling, we’re sure. But when those bills arrive from your natural gas utility, suburbanites, you can take some comfort: Those charges could have been considerably higher.
The Illinois Commerce Commission, which regulates utilities, slashed Nicor’s request for a delivery rate hike nearly in half last month. A proposed increase of $314 million was reduced to $168 million. That still will add $4.25 per month to the average Nicor household’s gas bill, but like we said — it could have been considerably worse.
The five-member commission under Gov. JB Pritzker has become a body that truly looks out for consumers. On its face, that doesn’t seem like a remarkable statement. But if you know the history of the ICC — and of course there’s no reason you should — you understand that the body over the decades more often than not has given the benefit of the doubt to utility arguments in favor of expansive capital spending budgets.
In the world of utility regulation, more spending on infrastructure means higher rates for consumers because utilities earn a set profit on their investments. So the job of the regulators at the ICC should be to determine how much of that spending really is justified. All too often in the past, commissioners deferred to utilities. No longer. Our pocketbooks are the better for it.
Soon the ICC is expected to face similar requests from Peoples Gas, the utility responsible for keeping most Chicagoans warm. The CEO of WEC Energy Group, the Wisconsin-based parent of Peoples, told analysts Oct. 30 on a quarterly earnings that Peoples will file for its next rate hike early next year.
And it could be a doozy.
Heating bills in Chicago have increased sharply over the past decade thanks in large part to Peoples’ disruptive, overbudget and inefficient work to replace hundreds of miles of aging gas pipes below the city’s streets, tearing up (and not restoring) many people’s front yards and landscaping. Some of those pipes, the utility has said, are a century old and present a safety risk. The ICC earlier this year put an end to how Peoples was managing the monumental job, saying it was unaffordable for too many Chicago households.
The utility is supposed to be in the process of reworking its approach per the commission’s guidelines. But, based on the comments to analysts from WEC CEO Scott Lauber, the new program looks an awful lot like the old one.
Lauber said WEC wants to boost the $90 million a year that Peoples planned to spend on pipe replacement after the commission’s rebuke to something like $500 million by 2028. That’s well above the $265 million Peoples shelled out annually on average during the highest-spending years of the program the ICC has halted.
Chicago, with a far greater percentage of low-income households than in Nicor’s service territory, can’t afford the sorts of rate hikes that would be needed to support utility spending at that scale. We trust this iteration of the ICC understands as much.
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