REPRESENTING ONE OF the core partners of the Campaign to End Energy Poverty is Naomi Davis at the podium during a protest outside Chase Tower in downtown Chicago.
As the U.S. economy continues to recover from the pandemic, many families are faced with inflationary prices that have outpaced their wages, especially for economically challenged communities. A recent decision by the Illinois Commerce Commission (ICC) provided a bright light for the future and the upcoming holiday season.
On November 16, 2023, the ICC rejected rate hikes requested by Peoples Gas and North Shore Gas for their natural gas delivery services in Illinois. Peoples Gas asked forn $403.98 million while North Shore Gas asked for $16.59 million and a 9.90 percent Return on Equity. Instead, the ICC disallowed $101.12 million and $5.57 million of Peoples and North Shore Gas respective rate requests.
In addition, the decision establishes a new low-income discount rate for eligible customers whose incomes are up to 300 percent of the Federal Poverty Level (FL). This decision is being applauded by core partners of the Campaign to End Energy Poverty sponsored by Blacks in Green (BIGtm), which consists of more than a dozen organizations and BIG’s lobbying affiliates Green Power Alliance and the National Consumer Law Center (NCLC).
Their goal was to create much-needed, robust discount rates for the state’s financially struggling gas utility customers, and hold gas companies accountable by reigning in their proposed gas rate hikes and spending. For low and moderate income households, prices for the life-essential service of home heat have long outpaced wage increases, exceeding the state affordability standard of 3% maximum of household income, the same standard for household electricity.
The discount rates advanced by the ICC were key components of the People’s Utility Rate Relief Act [PURR] introduced by the campaign coalition in the 2023 Illinois General Assembly, the only bill focused exclusively on energy affordability. The bill featured a comprehensive suite of revenue-neutral provisions designed to reduce light and heat costs, service disconnections, and other harms disproportionately impacting low and moderate income customers.
The final ICC orders responded to $794 million in proposed gas rate hikes by Nicor Gas, Peoples Gas, Ameren Illinois and North Shore Gas and include ground-breaking changes to business-as-usual practices by gas utilities, including:
• Adoption of the five-tiered, low-income discount rate proposals
• Decreased fixed, monthly customer charges
• An end to accelerated pipe replacements
• Significant disallowances for unjustified gas infrastructure investments
• Requirement of gas utilities to file bi-annual long-term infrastructure plans, and
• A statewide Future of Gas investigation
“Discount rates for utility customers are an urgent, common sense, proactive measure with unparalleled power to reduce energy insecurity that’s burdening millions of Illinois ratepayers – producing utility bill arrearages of over $40 million every month; causing disconnections for homes with seniors, children, and the infirmed; and triggering credit dings that routinely lower customer ability to secure certain apartments, jobs, and benefits. Not a single utility program or government-funded payment support, nor all of them combined, have the power to prevent this vulnerability month-over-month like the new ICC discount rates. We’re grateful for the wisdom that applies the discount to the whole bill, across all ratepayer classes, with greatest discounts tiered to those with lowest incomes,” said Naomi Davis, founder and CEO of Blacks in Green and its lobbying affiliate Green Power Alliance.
“This is a historic moment. After years of passing requested rate hikes from the utility companies without much hesitation, the ICC made a statement last week by reducing the rate hike requests and adopting crucial protections for low-income residents,” said Alexis Vaughan, Director of Justice Organizing and the Campaign to End Energy Poverty at Blacks in Green. “There is still plenty of work that needs to be done, but the decision today made it clear that Illinois is moving toward a future of affordable clean energy, and we hope that legislators will follow the ICC’s lead and further protect vulnerable households from disconnection through passage of the PURR Act.”
“Each month, families across Illinois open unaffordable utility bills that force us to make difficult decisions to avoid disconnection,” said Donna Carpenter, Co-Chair of COFI’s Stepping Out of Poverty Campaign and Co-President of COFI’s POWER-PAC Illinois. “We thank the commissioners at the ICC for truly listening to us, the financially struggling utility customers, and for acknowledging that continuous rate increases are simply unaffordable for so many of us across the state. This is an amazing step in the right direction!”
“The Commission’s ground-breaking decision to adopt the recommended discount rates will help ensure Illinois’ financially struggling customers will be able to afford monthly heating bills during our long, cold winters,” said National Consumer Law Center Senior Attorney Karen Lusson, who represented COFI in the Peoples Gas/North Shore Gas and Nicor cases. “At a time when utility customers across the nation struggle daily to afford energy bills and other essentials, the Illinois Commission’s decision to specifically assess the affordability of gas utility bills creates a model for commissions across the country.”
“The Illinois Commerce Commission handed consumers an important victory today by agreeing to keep Illinois gas utilities’ unfair fixed charges in check, while simultaneously ordering the companies to implement a low-income discount rate that will set a national standard for equity and fairness. While much work remains to be done to keep down energy costs, Legal Action Chicago is proud to have helped lead this winning effort to put people over profits,” said Dan Schneider, senior attorney at Legal Action Chicago.
“It has never been more important to ensure that every customer has access to affordable energy that does not worsen climate change. These historic decisions cement Illinois’ leadership on clean energy and equity. Every dollar makes a difference to families struggling to pay their bills, and every dollar invested in clean energy instead of capital-intensive fossil fuel infrastructure gets us closer to a healthy future for all,” said Christie Hicks, Senior Director for Equitable Regulatory Solutions, Environmental Defense Fund.
