Judge recommends reducing Peoples Gas rate hike request, but it would still set a record

CHICAGO (CBS) -- An administrative law judge has recommended lowering the rate hike that Peoples Gas had been seeking, but the increase would still mean customers would be facing a record-setting increase in their bills.

Peoples Gas had asked the Illinois Commerce Commission to approve a rate hike of $402 million beginning next January, but an ICC administrative law judge has instead recommended state regulators approve increases totaling $350 million, about 87% of the utility's original request.

Either way, it would be the largest rate hike Peoples Gas customers have ever seen.

CBS 2's Sara Machi dug into what that means for customers as the weather gets colder.

Donna Carpenter has lived in her West Englewood home for about 10 years, watching as utility costs reached new heights last winter.

She said her Peoples Gas bill jumped $300 to $400.

"When you are on a fixed income, that's impossible to keep up with," she said.

She's now watching a potential record rate increase as it nears a final vote with the Illinois Commerce Commission, and she's not alone.

"Of course, we're disappointed to see that the proposed order adopted a lot of Peoples Gas' requests, and if it's approved, it would still constitute the highest gas rate hike in Illinois history," said Sarah Moskowitz, executive director of the Citizens Utility Board (CUB), a non-profit utility watchdog group.

Peoples Gas has said the money from the rate hike will go to fund a pipeline replacement program.

"Chicago has pipes running beneath its streets that date back to the 1800s. They're at the very end of their useful lives," spokesman David Schwartz said.

Schwartz said any rate increase could be offset by current gas prices, which have been falling over the last year, dropping below $1 per therm in April. That's a nearly 80-cent drop from last year.

But gas prices fluctuate.

The bottom line is CUB expects the delivery portion of gas bills to go $120 per year for the average Peoples Gas customer.

Lower gas prices, for now, might offset part of that increase.

Where could Carpenter make cuts to make up for that higher gas bill?

"That's a hard question to answer, because right now I really truly do not know the answer to that," she said. "I am going back to my calculator."

The ICC is expected to vote on the r ate hike at a meeting on Nov. 30 or Dec. 14, but Moskowitz said it is also possible the agency could schedule a special meeting before then.