Nicor Gas residential customers could see their annual bills rise by an average of 8.3 percent, or $4.79 a month, in 2018 under a proposed rate hike the company is seeking to recoup higher costs.
Nicor, which is owned by Southern Co., on Friday filed for the delivery rate hike with the Illinois Commerce Commission, the state’s utility regulator.
Nicor’s last rate case with the commission was in 2008, Nicor President Melvin Williams said Friday, in testimony to the ICC that Nicor shared with the Tribune.
Higher costs are prompting Nicor, which serves 2.2 million customers in northern and central Illinois, to seek a new rate hike, he said.
Williams cited several factors: spending on the modernization of pipelines, wellheads and other infrastructure; investments in a “next generation” workforce that “is well-trained and prepared to replace” aging employees; expenses to comply with new state and federal pipeline regulations; and improving customer service, including through greater access to data through smartphones.
Nicor has 2,100 full-time workers and expects to boost its workforce “to address ongoing operational needs,” Williams said. Nicor collaborates with high schools, for example, to educate students about job opportunities and to encourage them to go into fields related to science, technology, engineering and math, he said.
Even with the proposed rate increase, Nicor said the typical residential customer bill in 2018 would be 19 percent less than it was in 2010. Nicor would still be among the lowest-cost natural gas providers to residential customers in Illinois, spokeswoman Kristie Benson said.
If the ICC approves Nicor’s proposed rate increase, the typical customer would pay a total of $710.35 in 2018 for the customer charge, distribution and gas supply portions of his or her bill, compared with $994.47 for the typical Peoples Gas customer, according to documents filed with the ICC. That comparison doesn’t include taxes and certain other charges that vary by utility.
Delivery rates — what utilities charge to cover the costs of delivering gas to homes, plus a built-in profit — account for a third to a half of gas bills.
The Citizens Utility Board, a residential utility watchdog for Illinois consumers, said Nicor’s total delivery rate hike amounts to $208.5 million. It said it expects the ICC to rule on the request in 11 months.
“CUB will give Nicor’s proposal a thorough review, and we will challenge every penny of the increase that the company can’t justify,” the board said Monday in a news release.
The organization also warned that even customers who have signed up for an alternative gas supplier still pay Nicor’s delivery charges, so consumers should be wary of sales pitches that households can avoid the rate hike by going with an unregulated supplier.