As President-elect Donald Trump extolled the virtues of natural gas during a post-certification speech Tuesday, details emerged about a proposed $309 million Nicor Gas rate increase that seeks to raise delivery charges for Chicago-area customers by more than 20% next year.
Filed Friday with the Illinois Commerce Commission, it is the fifth rate hike requested by Nicor since 2018. Regulators have 11 months to review the new proposal, which, if approved, would be the largest gas rate increase in Illinois history.
In a statement Tuesday, Nicor said the proposed record rate increase is needed to replace aging infrastructure and update technology to serve its 2.3 million customers in suburban Chicago and across northern Illinois.
“Many Americans are facing challenging times, and no one wants to see rising energy bills,” Jennifer Golz, a spokesperson for Naperville-based Nicor, said in the statement. “We want our customers to understand their bills and why the company is requesting to adjust rates that would allow Nicor Gas to meet those energy demands, especially during extreme weather.”
Residential gas bills include both supply and distribution charges. Nicor’s proposed rate increase would raise the cost of delivering the gas, which accounts for about half the bill.
For typical Chicago-area residential customers, the proposed increase would add about $7.50 per month to delivery charges, raising the total bill by just over 9%, Golz said.
Nicor, which is owned by Atlanta-based Southern Co., is the largest gas utility in Illinois. The rate hike request includes a 10.35% return on equity for shareholders of Southern Co.
In a statement Tuesday, consumer advocates at the Citizens Utility Board vowed to challenge Nicor’s proposed record rate increase.
“Heat is a human necessity, not a profit tool,” CUB Executive Director Sarah Moskowitz said in the statement. “But Nicor’s push for a ridiculous 10.35% return on equity … exposes this rate-hike request for what it is: A money-grab meant to benefit shareholders to the detriment of customers who just want to keep their homes warm in an Illinois winter.”
Nicor Gas customers have seen their delivery rates increase by $724 million since 2018, including most recently, a $223 million dollar hike granted by the ICC in 2023.
The ICC has 11 months to review rate cases, meaning the earliest Nicor could implement the proposed $309 million increase would likely be January 2026.
Nicor said the proposed rate increase would be applied in part to infrastructure projects, such as the replacement of steel pipelines dating back to 1959.
The Nicor rate increase proposal lands as the ICC is in the final weeks of determining the fate of the Peoples Gas pipeline replacement program, which was paused last year during an investigation into the long-running project to replace 2,000 miles of aging pipes under Chicago.
In November, two Illinois Commerce Commission administrative law judges issued a proposed order recommending Peoples Gas resume and finish the work by 2035, at a projected additional cost of $7.2 billion.
Launched in 2011, the Safety (formerly System) Modernization Program was originally projected to cost $2.6 billion and take 20 years to complete. Plagued from the outset by delays and budget overruns, the program has already cost $3.3 billion and is just 38% complete, according to the utility.
That puts the total price tag of the program at $10.5 billion if the ICC adopts the administrative judges’ recommended plan. The utility’s 891,000 Chicago customers would bear the cost of the pipeline replacement program through their monthly bills.
The five ICC commissioners are now expected to issue a final decision on the pipeline replacement program in February. If the resumption of work is approved, any associated rate increases to customers would require a full review and would not be implemented before 2026, Peoples Gas spokesperson David Schwartz said Tuesday.
After four years of the Biden administration’s push for the transition to clean energy, it is unclear how the incoming Trump administration might affect infrastructure programs and the future of gas in Illinois — the subject of an ongoing ICC review studying decarbonization of the state’s gas system.
The president-elect’s speech Tuesday, which decried everything from electric vehicle mandates to wind turbines, indicated the broader political climate for fossil fuels may be changing during Trump 2.0. Assailing new rules for more efficient tankless gas water heaters by 2029, Trump launched into an ostensibly broader pro-natural gas screed.
“It’s a much better heat, as the expression goes, ‘You don’t itch,’” Trump said. “They don’t want you to have gas where you don’t have the problems of the electric and the source is plentiful. They’re much cheaper to operate. They’re much better. They work much better. They look much better.”