The Illinois Commerce Commission (ICC) approved a rate increase for Nicor Gas, which supplies natural gas to northern Illinois, on the 15th. The approved increase stands at $81.6 million annually, representing about a 63% reduction from the $220.8 million initially requested by the company.
Changes to Monthly Base Charges and Customer Impact
Under the settlement, the monthly base charge paid regardless of gas usage will be reduced from the current $21.30 to $15. The lowered base charge is scheduled to take effect starting November 16th. Although the base charge decreases, variable fees tied to gas usage will rise, resulting in an estimated average annual increase of $26 for residential customer burdens overall. Actual bill fluctuations may vary depending on individual usage.
Adjusted Return on Equity and Cost Management
With this agreement, the authorized return on equity for Nicor Gas investors has been lowered from the initially requested 10.35% to 9.48%, remaining higher than the 8.95% demanded by consumer advocacy groups. The company also agreed to analyze the cost-effectiveness of alternative methods for certain aging pipeline replacement projects over a 10-year period and discuss the potential use of internal pipeline reinforcement techniques with relevant organizations. Executive incentive compensation support previously included in the rate hike proposal was withdrawn.
Consumer Group Reactions and Future Outlook
While consumer groups acknowledged that the scale of the increase was reduced from the initial demand, they expressed ongoing concerns over consecutive rate hikes. The consumer advocacy group Illinois PIRG criticized that Nicor Gas rates have surged by approximately 150% over the past decade, arguing that unnecessary fossil fuel infrastructure investments are amplifying consumer financial burdens. In response, Nicor Gas stated that it will continue facility investments for safe and stable gas supply while striving for cost management and customer rate support.
