Statement By Citizens Utility Board (CUB) Executive Director David Kolata On The Peoples/North Shore Gas Rate-Hike Request

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Feb 26, 2014, 06:14 ET

CHICAGO, Feb. 26, 2014 /PRNewswire-USNewswire/ -- Peoples Gas and North Shore Gas asked the Illinois Commerce Commission (ICC) today for a combined rate increase of $136 million per year (about $128.9 million for Peoples and $7.1 million for North Shore).

It's never good to hear about a rate hike, but Peoples Gas and North Shore Gas show terrible timing announcing this request in the middle of a winter that is shaping up to be one of the coldest and most expensive ever for Illinois consumers. Peoples and North Shore Gas—whose parent company made more than $220 million in the first three quarters of 2013 alone—will have a fight on their hands to justify every penny of their proposed $136 million increase.

CUB also is concerned that the companies announced on the same day that the per-therm price of gas will increase to around 93 cents per therm for Peoples Gas and 88 cents per therm for North Shore Gas in March. This significant increase over current prices—80 percent for Peoples and 55 percent for North Shore—raises questions that merit further investigation.

BACKGROUND:

-Peoples Gas said the $128.9 million increase would average about $5 per month for "typical residential heating customers." North Shore estimated the impact at about $2.50 per month for its customers.

-The Illinois Commerce Commission (ICC) will rule on the Peoples/North Shore request after an 11-month case. So, the higher rates would hit customers in the winter of 2015.

-These "delivery" rate hikes would increase what the companies charge to deliver gas to homes. Those charges take up about a third to a half of a gas bill. The rest, roughly, is taken up by the price of the actual gas. Utilities are allowed to make a profit off the "delivery" charges on bills, but not the cost of the actual gas. Under law, utilities are supposed to pass the cost of gas onto customers, with no markup.

CUB is Illinois' leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds over the years. For more information, call CUB's Consumer Hotline at 1-800-669-5556 or visit CUB's award-winning website, www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board