Utility group warns of Chicago-area gas rate increase

Consumer watchdog says state bill could lead to gas rate increase.

March 26, 2013

Scott Kanowsky

(WBEZ/Scott Kanowsky)
Citizens Utility Board Executive Director David Kolata at a news conference in Chicago on Tuesday. Kolata calls legislation in both the Illinois House and Senate a “trojan horse” that could lead to a boost in Chicago-area gas utility rates. Local utility companies supporting the bill refute the claim, saying it will make gas pipelines safer and protect jobs.

A utility watchdog group says a proposed state bill could raise some Chicago-area gas utility rates.

The legislation would let some utility companies recover the money used in a ten-year program to modernize local gas pipelines.

But David Kolata, executive director of the Citizens Utility Board, calls it a “trojan horse” that would allow companies to boost rates over the next decade.

“Currently, gas utilities must prove they need rate hikes before the Illinois Commerce Commission. What this bill would do is essentially leapfrog that process and give gas utilities a blank check — yearly, automatic rate increases that guarantee an excessive profit rate,” Kolata said at a news conference Tuesday.

Local natural gas supplier Peoples Gas refutes that claim, saying the bill creates a safer gas infrastructure and protects jobs, while still including the ICC in the rate-setting process.

“This bill [...] would bring Illinois’ regulatory framework into the 21st century and allow for investments enhancing the safety and reliability of our state’s natural gas infrastructure,” Peoples Gas said in a statement.

Company spokesperson Kathy Hartman said in a phone interview Tuesday the company is projecting an average monthly gas utility rate increase of $2.25 per year for its customers if the legislation passes and the ten-year modernization project begins. She said these increases are “necessary to support the modernization of the system.” 

Meanwhile, Hartman said Peoples Gas has similar projects planned in Chicago’s Portage Park, Austin, and South Shore neighborhoods in 2013.

“There’s...a plan over the next ten years to address a number of areas across the city,” she said.

Two versions of the measure are currently in the Illinois House and Senate. Neither of the bodies have yet to formally vote on the legislation.