Chicago alderman raises alarm about Peoples Gas request for record rate hike
CHICAGO (CBS) -- Peoples Gas is asking the Illinois Commerce Commission (ICC) for a record $402 million rate hike. If state regulators approve the rate hike, it would add roughly $12 to the average monthly gas bill starting in January.
Concerned that the utility providing natural gas service to nearly 900,000 customers in Chicago is seeking a major rate hike while earning record profits, Ald. Bill Conway (34th) led an effort by the City Council Committee on Environmental Protection and Energy to grill Peoples Gas officials earlier this week.
"They are asking for a record rate hike after six straight years of record profits, and what was a bit troubling in the hearing is they said, if we don't get that, they are likely to cut jobs and cut charitable contributions, and I don't think that's right," he said.
Conway has said many low-income homeowners are already deep in debt to Peoples Gas, because they can't afford their current heating bills.
"For example, in Englewood, where almost half the customers are in debt, and the average debt load is almost $1,000, and yet Peoples Gas requesting a record rate hike at a time when this will simply put low-income Chicagoans further into debt," he said. "What's especially troubling is that in their previous earnings release, Peoples Gas credited late fee revenue as a driver of that profit, and of course that late fee revenue hits disproportionately on low-income Chicagoans, and a record rate hike in these times seems that it will be especially hard-hitting."
Peoples Gas has said the money from the rate hike will go to fund a pipeline replacement program, saying some of the pipes running beneath Chicago date back to the 1800s, and are at the end of their useful lives.
The utility also has said any rate increase would be offset by current gas prices, which have been falling over the last year, standing at 99 cents per therm as of September, down from a peak of $1.75 per ther min August 2022.
Conway argued that natural gas prices are volatile, so could easily soar again in the next year.
An administrative law judge has recommended lowering the rate hike that Peoples Gas has been seeking to $350 million, but even that increase would still mean customers would be facing a record-setting increase in their bills.
"The point that we need to make to the ICC is that it's not necessarily low-income Chicagoans and their late fee revenue that should be funding this, but shareholders should play a bigger role in that as well," Conway said.
The ICC is expected to vote on the rate hike at a meeting on Nov. 30 or Dec. 14, but it is also possible the agency could schedule a special meeting before then.