A settlement with Nicor Gas cuts $140 million from the utility's rate increase request, Illinois Attorney General Kwame Raoul's office announced.
The deal, reported Wednesday, Sept. 9, by the Chicago Tribune, reduces Nicor's proposed rate hike from $221 million to about $82 million. If the Illinois Commerce Commission (ICC) approves the agreement, the average residential customer would pay about $2.21 more per month, according to Nicor. The original request would have added roughly $6 per month.
The deal isn't final. The ICC is expected to rule by November.
Nicor Gas is the largest gas utility in Illinois, serving 2.3 million customers across suburban Chicago and northern Illinois. That territory includes the Downers Grove area. The company, owned by Atlanta-based Southern Co., filed its $221 million rate increase request in January, citing the need to replace and repair aging pipelines and equipment.
Raoul's office alleged Nicor overstated its forecast capital spending and inflated an accounting mechanism to bolster profits, Capitol News Illinois reported.
What changes on your bill
The settlement lowers the fixed monthly gas delivery charge from $21.30 to $15.00, set to take effect Nov. 16 if approved. Every Nicor customer pays that charge regardless of how much gas they use.
Nicor also agreed to accept a lower profit rate on its infrastructure investments: 9.48%, down from the 10.35% it had sought. The company pledged to consider alternatives to traditional pipeline replacement.
"Our settlement ensures Nicor can continue to retain good jobs in Illinois while protecting consumers from drastic rate increases," Raoul said in a statement.
Side deal draws criticism
Raoul's office signed a separate agreement with Nicor committing the utility to maintain 2026 union staffing levels through the end of 2027 and continue capital investment at current levels. Consumer and environmental groups that were party to the main settlement were not part of that supplemental deal.
Abe Scarr, director of Illinois PIRG, told the Chicago Tribune the secondary agreement commits Nicor to excessive spending. Rob Kelter, senior attorney at the Environmental Law & Policy Center, told Capitol News Illinois the deal locks in capital budgets rather than signaling the utility to be prudent.
Kelter called the overall settlement a compromise, telling Capitol News Illinois he believes it keeps moving in a positive direction for customers.
Nicor said in a statement that the settlement reflects a commitment to balancing customer needs with the company's obligation to provide safe, reliable service.
What's next
As part of the deal, Nicor agreed to withdraw its appeal of last year's rate case, which the ICC had cut by nearly 47% to $168 million. That prior case raised average delivery costs by $3.30 per month this year. Raoul's office said dropping the appeal protects customers from possible future rate increases had Nicor won in court.
The ICC is expected to rule on the new settlement by November.
