The Illinois Commerce Commission slashed a proposed $314.3 million Nicor Gas rate increase by nearly 47% Wednesday, keeping a lid on rising energy bills for many suburban Chicago customers next year.
The ruling, issued during an open meeting in Chicago, reduces Nicor’s rate hike by $146.5 million. For customers, that translates to an average increase of about $4.25 per month beginning with the January bill, the utility told the Tribune.
“The ICC’s responsibility is to balance the interests of Illinois’ utilities and their consumers,” ICC Chair Doug Scott said in a news release. “We recognize that any decision impacting Illinoisans’ bills is not a small one, and after careful review of Nicor’s proposed investments, the Commission opted to strike excess charges and approve necessary and justified projects.”
Nicor filed in January for the largest gas rate increase in Illinois history, saying it needed to replace aging infrastructure and update technology to serve its customers. Consumer groups had been seeking deep cuts in Nicor’s proposed record gas rate hike — the utility’s fifth in eight years — as customers grapple with higher energy costs.
In October, two Illinois Commerce Commission administrative law judges issued a recommendation to cut Nicor’s proposed $314 million rate increase by more than a third, to $204 million. The commission went even further Wednesday, reducing it to about $168 million.
Beyond cutting pipeline replacement budgets, the ICC lowered the requested return on equity for shareholders of Southern Co., Nicor’s parent, from 10.35% to 9.6%, further downsizing the rate hike.
“We applaud the Commission’s clear and consistent message to Illinois gas utilities: stop the excessive spending that has driven up rates over the past decade,” Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, said in a statement.
In a separate decision Wednesday, the ICC cut $55.8 million from a $128.8 million rate hike proposed by Ameren Illinois, a 43% reduction that also included a lowered 9.6% return on equity for the company. Ameren Illinois has 816,000 gas customers in central and southern Illinois.
Nicor, which is owned by Atlanta-based Southern Co., is the largest gas utility in Illinois, serving 2.3 million customers in suburban Chicago and northern Illinois.
Residential gas bills include both supply and distribution charges. The approved $168 million Nicor rate hike will raise the cost of delivering the gas, which accounts for about half the bill. Customers will see the line item increase on their January bill.
For typical Chicago-area residential customers, the proposed $314 million increase was expected to add about $7.70 per month to delivery charges, raising the total bill by nearly 9.3%. That increase will be significantly reduced by Wednesday’s ICC decision.
“We still don’t have the final order from the ICC,” Nicor spokesperson Jennifer Golz said. “Based on early calculations, we believe the monthly bill impact for an average residential customer will be less than $4.25 per month, or less than 5% of the total bill annually.”
Chicago-area utility customers have been hit this year with a one-two punch of higher delivery rates and spiking energy costs. Nicor saw its gas supply prices peak at 58 cents per therm in April, up 71% over the same month last year. In November, Nicor charged customers 39 cents per therm, still up nearly 40% year-over-year, according to published ICC data.
Some ComEd customers saw a triple-digit increase in their total June electricity bills due to a supply rate increase and high demand during a summer heat wave.
While energy supply prices fluctuate, with 80% of Illinois homes relying on natural gas for heat, the ICC decision to cut Nicor’s proposed rate increase will provide some measure of certainty for this winter’s bills. It may not be enough relief, however, for many customers, Scarr said.
“While we’re pleased regulators lowered the size of these rate hikes, they are still the fifth increase for Nicor since 2017,” Scarr said. “Without intervention, gas bills will continue to rise. Illinois urgently needs to pursue a managed transition to safer, cleaner energy to heat our homes.”
Meanwhile, Peoples Gas, which serves 894,000 customers in Chicago, is gearing up to resume the next leg of its long-running, multibillion-dollar pipeline replacement program, hosting a forum last week to present updated plans.
In February, the ICC rejected a broader $7.2 billion proposal by Peoples to modernize its entire system by 2040, which included upgrading to medium pressure and moving gas meters outside homes. Instead, it ordered the utility to prioritize the pipeline replacement and justify the work in its annual rate hearings to recover the costs.
The utility’s new Pipe Retirement Program plans to replace 1,000 miles of aging pipeline under the city of Chicago by 2035, ramping up to a cost of about $500 million annually by 2028, according to a third-quarter earnings call last month by parent company WEC Energy.
https://www.chicagotribune.com/2025/11/19/nicor-gas-rate-hike-icc/
