Chicago residents speak out against $402M record gas rate hike proposal

CHICAGO - Chicago residents are pushing back against a record-breaking rate hike proposal by Peoples Gas.

On Tuesday, the Illinois Commerce Commission held a public hearing at the University of Illinois-Chicago to consider the proposed residential gas rate increase by the utility giant.

Peoples Gas filed the $402 million rate-hike request in January in what would be the largest gas increase in Illinois history, impacting more than 250,000 people in Chicago. The IIC has until the end of the year to rule on the utility’s rate increase request.

Speakers told ICC officials that many families are already having trouble affording necessities like groceries because of inflation, and a gas rate increase would only add to pressure on households.

Summer Pappachen, a Near West Side resident, said she wasn’t planning on attending the forum until she realized it was about Peoples Gas asking for a rate hike. She asked the ICC to reject the request and criticized the company for even asking for more money from customers.

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"Life is not affordable right now, people are moving out of the city in thousands because they can’t afford rent, forget utilities that are stacked on top of that," Pappachen said. "Don’t come asking poor people for more money."

Lily Scales, a resident of the Lower West Side, also admonished the company for seeking the hike given rising costs of living for residents.

"At a time when we are all being asked to make sacrifices to afford the rising costs of food, healthcare, childcare and energy, I am truly perplexed by the audacity of a company asking us to bear the burden of their proposed rate hike when they continue making record profits," Scales said.

Peoples Gas made $208 million in profit in 2022, breaking its earnings record for the sixth year in a row, according to a year-end financial report issued in March.

The nonprofit watchdog Citizens Utility Board has argued the hike would fuel "an excessive profit rate" and should be slashed by at least $63 million.

The request would raise the average residential bill by about $11.83 a month starting in January, although the utility says it expects most customers’ bills would remain "largely flat" because natural gas prices are expected to fall.

"This is the first time in nine years we’ve requested a base rate adjustment. The increase we are requesting will be offset by declining natural gas prices — leaving customer bills relatively flat for next year," Peoples Gas spokesman David Schwartz said in a statement.

According to the company website, Peoples Gas delivers natural gas to more than 884,000 customers in the city.

The hike seeks to offset a state Legislature-approved $15-per-month surcharge that has been in place for a decade but expires at the end of this year. That surcharge has funded a pipe replacement program that could end up costing more than $8 billion by the time it is completed in 2040. That’s nearly six times what the utility estimated in 2007.

Peoples Gas President Torrence Hinton told attendees that the pipe replacement program needs to continue as some pipes in Chicago are more than 150 years old and many are close to their failing point.

"Our iron pipes, pipes that are beneath many of the Chicago streets in every single neighborhood, carrying the natural gas you need to heat your home, are unfortunately at the very end of their useful life," Hinton said, pointing to an example of a rusted, cracked pipe on display on stage.

Tom Aridas, director of regulatory policy and local government affairs at Peoples Gas, said the new rates would go toward replacing those pipes and maintaining reliable service for customers.

"I assure you we did not take this decision lightly,’ Aridas said. "We are aware of the impact that increased rates may have on our customers. That is why we have worked so hard to avoid a filing for nine years."

But residents and environmental justice advocates said the company should be using its own profits to replace pipes, and the city should focus on moving away from natural gas to renewable sources.

That’s the message Caroline Wooten, organizing director of the Illinois Sierra Club, had for ICC officials at the meeting in asking them to reject the company’s request.

"I’m really troubled by using this rate hike to elongate the life of natural gas infrastructure," Wooten said. "This is a really good opportunity for us to start to transition to technology that is going to be safer for families and better for the climate."

Members of Local 18007 Gas Workers Union spoke in favor of the hike at the meeting, saying it would help secure higher wages for members and better work conditions.

And if the rate hike is approved, the company can expect organized opposition, some residents said.

"If this goes south, we’re going to go up," Pappachen said, referring to the opposition. "We’re gonna organize. We know what it means to fight back in the city of Chicago."

For consumers who were unable to attend the meeting, public comments can be left on the ICC website on Docket No. 23-0069 or by calling toll-free 1-800-524-0795 between 8:30 a.m. and 5 p.m. Monday through Friday.

AARP Illinois members who were unable to attend can return a postcard sent across northern Illinois, or by signing a petition here.

The Sun-Times Media Wire contributed to this report.