Nicor Gas Rate Hike Reduced by 63% After Settlement with Illinois AG

Illinois Attorney General Kwame Raoul's office and consumer watchdog groups have reached a settlement with Nicor Gas to reduce its rate increase request by 63%. The original proposal would have added $6 on average to residential customers' monthly gas bills, but the agreement would now add around $2. The rate hike was requested due to investments in the reliability of Nicor's natural gas distribution system and compliance with state and federal regulations.

The settlement reduces Nicor's shareholder profit rate from 10.35% to 9.48%, and the company has agreed to consider alternatives to traditional pipeline replacement. Nicor will also withdraw its appeal of its prior-year rate case, which regulators reduced by nearly 50%. The attorney general's office stated that dismissing the appeal protects Nicor customers from possible future rate increases.

Consumer advocates were generally pleased with the agreement, but some expressed concerns about a secondary deal that commits Nicor to maintaining union staffing levels and capital investment. Abe Scarr, director of Illinois Public Interest Research Group, called this provision 'bad policy' and stated that it could lead to inflated spending on infrastructure.