IL Customers Face Gas Utility Rate Hikes
Posted onPeoples Gas Seeks $402 Million Rate Hike
Inflation in the US is at a record high, making it hard for most families to pay for basic necessities. And part of that comes from rising rates from Illinois gas utilities. In the Chicago area, Peoples Gas recently filed for a $402 Million rate hike that would increase customer's bills by an average of $12 a month, or $144 a year. And they've cited a need to replace old gas infrastructure as reason for the rate hike. But will the money be used responsibly? And how will this affect your natural gas rates?
"Disturbing Pattern of Mismanagement"
In response to state regulators' questions about its pipeline replacement program, Peoples Gas filed three reports in May. According to the Citizens Utility Board, these filings show that the company has consistently been over budget and behind schedule since the project began in 2011. And in addition to refusing to answer ICC questions regarding the program, the company admitted to not doing an overall costs analysis in nearly a decade. Their quarterly reports also suggest the company has been behind schedule for 21 straight quarters retiring less than half of its 10.1 mile pipe-replacement goal. The overall cost of was $10.6 million per mile of retired pipe—more than twice the $4 million planned. And Chicago rate payers are shouldering the burden.
Gas Rate Hike Request Follows Years of Record Profits
The main bone of contention between customers and Peoples Gas is that the company has enjoyed over 6 years of record high profits. In 2022, the company earned over $209 million. And for the past ten years like other gas utilities in the state, Peoples Gas was collecting a customer fee, known as the “qualified infrastructure plant,” or QIP, that was designed to pay for infrastructure upgrades and maintenance. The QIP fee began in 2013 and for some customers has increased by nearly $10 over the past decade. The QIP fee ends at the end of the year.
High Gas Rate Means Higher Bills
Opponents of the rate hike argue that Peoples Gas has mismanaged their bad debt. Currently, if a utility can't collect a debt from customers, the state allows them to pass this costs onto others through a surcharge. In 2017, the company halted disconnections while installing a new billing system. This caused a huge rise in bad debt for the company, that was then passed on to customers. And the ICC recently ruled that they must refund that $15.4 million.
Others argue that current customers can ill-afford such a hike. Most pay nearly $50 a month in fixed charges in addition to their gas usage. As a result, some winter time bills can go over $200. In May 28% of Peoples Gas customers were unable to pay their gas bills on time. This resulted in them owing more for late charges and fees to Peoples Gas.
Avoid Gas Utility Rate Hikes
No matter where you live in Illinois, you don't have to put up with gas rate hikes. Shopping for a better natural gas rate can save you a ton of money, especially if utility rates increase. Find the best natural gas plan for you, compare reviews, and more with https://www.ilenergyratings.com