Peoples Gas, Nicor claim rate hikes will be offset for consumer by overall lower gas prices
CHICAGO (WLS) -- Peoples Gas is planning a potential $12 increase on monthly bills through a rate hike in early 2024, but claims consumers' overall bills should not go up because the overall price of natural gas is going on down.
But a consumer watchdog group questions that assertion, and struggling consumers are on edge.
Lori Armatys' most recent gas bill was $255. The former paramedic, now on medical disability, gets help paying her bills through state programs at the Northwest Center.
"I figured out my budget for next month and the lump sum goes for the gas bill," she said.
Armatys is not looking forward to the possibility of her bill increasing in 2024.
The consumer watchdog group Illinois PIRG is monitoring recent "increase requests" which gas utilities made to the state.
"Peoples Gas is proposing a $402 million increase that will blow the record and be the largest rate increase in Illinois history," said PIRG's Abe Scarr. "The second largest rate increase in history is the one that was just proposed by Nicor gas, at $321 million."
As a result, next year there could be a $12 increase each month for Peoples Gas customers and $9 more a month for Nicor customers.
Both companies said rate hikes are needed for maintenance costs and investments in continued reliable infrastructure.
Peoples Gas claims despite the rate increase, your overall bill should not change.
"The reason for that is that a separate part of the bill, the part that accounts for the cost of the actual natural gas customers use, that cost is expected to go down," said Spokesperson David Schwartz. "That cost is expected based on the following global natural gas prices. So the net result is that the typical customer is expected to see little to no impact on their total bill."
PIRG said the projection of natural gas costs for 2024 is not guaranteed.
"So it's really a misdirection to get people to not focus on the fact that they're proposing to raise your rates," said Scarr.
And when asked about the certainty of gas prices dropping, Schwartz had to agree it was not guaranteed,
"The continuing decline of natural gas prices, as you said, are not guaranteed, that said, the gas cost forecast is based on the best available information from expert analysts, and these are the same forecasts and experts that pointed to sharply rising natural gas prices about 18 months ago," Schwartz said.
Peoples Gas added that the rate increase is also necessary to help continue to pay for its System Modernization Program, and that a state approved $15 surcharge on your bill for that program will be going away.
Nicor released a statement saying in part, "Even with the proposed request, Nicor Gas' distribution rates will remain among the lowest of any major natural gas utility in Illinois...This rate increase is necessary to run our business due to inflation and rising global impacts that continue to affect our operating and maintenance costs."
Other Illinois gas providers are also asking for the state to approve increases.
All gas companies have programs which offer assistance to those who qualify. There are also state, county and city programs which can help you pay your bill.
If you are behind, call the utility. Do not ignore it. You can set up a payment plan to keep your heat on.
Resources for utility bill assistance:
Northwest Center financial counseling
