Legislators and Consumer Advocates Urge Springfield to End Abusive Gas Surcharge

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Jan. 31, 2022 

FOR IMMEDIATE RELEASE:                  
                       
AS ILLINOIS CONSUMERS SUFFER THROUGH A COLD, EXPENSIVE WINTER, COALITION URGES SPRINGFIELD TO END ABUSIVE SURCHARGE ON HEATING BILLS

With heating bills skyrocketing across Illinois, a coalition of consumer advocates joined with key legislators on Monday to urge the Illinois General Assembly to eliminate a natural gas surcharge that has helped major utilities rapidly increase bills, plunging many families into crisis this winter.

At a news conference, AARP Illinois, the Citizens Utility Board (CUB), Community Organizing and Family Issues (COFI), the Environmental Law & Policy Center (ELPC), Illinois PIRG and the Natural Resources Defense Council (NRDC) called on the General Assembly to pass the Heating Affordability & Utility Accountability Act (House Bill 3941/Senate Bill 570). Sponsored by state Rep. Joyce Mason and state Sen. Cristina Castro, the bill would end the “Qualifying Infrastructure Plant” (QIP) surcharge on Peoples Gas, Nicor Gas and Ameren Illinois bills in 2022.

“The legislation passed in 2013 was intended to address safety issues for consumers, not to serve as a blank check for utility companies,” Rep. Mason said. “For too long, gas companies have been allowed to indiscriminately raise their prices with little to no oversight from state regulators. We need to hold these companies accountable for their actions and put an end to out-of-control heating costs.”

“The passing of the landmark Climate and Equitable Jobs Act was an important step in holding natural gas companies accountable. Now, this legislation will go even further to end unnecessary surcharges on our residents’ utility bills,” state Sen. Castro said. “We’re doubling down on our state’s commitment to protecting ratepayers and demanding transparency from natural gas companies.”

Illinois’ major utilities have launched expensive and aggressive infrastructure projects, which they fund through delivery charges on gas bills. In 2013, the General Assembly allowed them to add the QIP charge to bills. This regulatory shortcut allows utilities to recover certain costs more quickly and with less oversight from the Illinois Commerce Commission (ICC).

The utilities claim the surcharge is a necessity to pay for pipe-replacement and other work. While everyone agrees old pipes should be replaced, consumer advocates argue the utilities should do it in a responsible way that doesn’t cause hardship for their customers. Utilities are already legally obligated to replace pipes, and they did it for decades without hitting customers with a special surcharge.

On Monday, consumer advocates showed how the utilities have abused the QIP charge, using it to rake in revenue more quickly and increase bills in the most expensive winter since 2008-09. 

Peoples Gas: Supporters of the 2013 legislation claimed the QIP would only cost Peoples Gas customers about $13 a year, but they are now paying more than $13 a month, on track to pay $150 a year. Projected costs for

the gas utility’s aggressive capital program have skyrocketed from about $2 billion to $11 billion, and an analysis by the Illinois Attorney General’s office estimated that gas bills could double over the next 20 years. The program has

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already begun to take its toll on customers: In December, 17 percent of Peoples Gas customers were behind on their bills, by a total of $77 million.

Nicor Gas: Even though the state’s biggest gas utility has already replaced its old cast iron pipes, it continues to spend at a breakneck pace, spending over a billion dollars since it replaced its last cast iron pipe in 2018. Nicor has raised delivery rates by more than $500 million, or 77 percent, since 2018. That includes this past November, when it won a $240 million increase—the largest gas hike in Illinois history.

Ameren Illinois: Even though Ameren has finished replacing cast iron pipes, the utility last year won a $76 million increase. 

“We cannot afford these charges,” said Donna Carpenter, of Englewood, a parent leader with COFI/POWER-PAC IL. “Greedy gas companies have passed these ridiculous charges onto customers time and time again, harming low-income Black and Brown communities who either have to be cold or can't afford to cook meals for their families because of sky-high gas prices. We need the Illinois Legislature to take action now!”

“On behalf of our 1.7 million members across the state and all Illinoisans 50+, AARP Illinois calls on legislators to make Illinois more affordable and pass HB3941/SB570 to bring immediate relief to Illinois residents who are already millions of dollars behind on their home gas bills,” says Ryan Gruenenfelder, AARP Illinois Director of Advocacy and Outreach. “We’ve heard from hundreds of our members about how these extraordinarily high bills are impacting them, and about the disproportionate impact on older adults with fixed incomes who have had to choose whether to heat their homes or afford basic necessities like food and medicine.”

 “Illinois law is encouraging gas utilities to hike our bills by wasting money on upgrades we don’t need,” said Abe Scarr, Illinois PIRG Director. “It's absurd, especially when we could be investing money on cleaner, safer energy to heat our homes,”

“It has been described as clean and safe, but burning methane gas is actually a significant source of air and climate pollution," said J.C. Kibbey, Senior Illinois Clean Energy Advocate with NRDC. "We must be looking at cleaner, healthier, more affordable ways to heat our homes - not doubling down on expensive gas infrastructure that impacts working families disproportionately and is incompatible with the clean energy future Illinoisans want."

“The Governor and the legislature have made reducing carbon pollution a top priority,” said Rob Kelter, senior attorney with the Environmental Law & Policy Center. “We need to re-evaluate our spending on natural gas, and focus on the transition to clean energy.”

“It’s time for Springfield to tell gas utilities to stop treating their customers like an ATM,” said Bryan McDaniel, CUB’s director of governmental affairs.

The coalition fighting for the bill includes AARP Illinois, Action Now, Blacks in Green, Brighton Park Neighborhood Center, Center for Changing Lives, Chicago Coalition for the Homeless, Chicago Urban League, Climate Reality Project -- Chicago Metro Chapter, Citizens Utility Board (CUB), Community Organizing and Family Issues (COFI), Community Renewal Society, Edgewater Environmental Coalition (EEC), Environment Illinois, Environmental Law and Policy Center, Financial Inclusion for All Illinois, Faith In Place Action Fund, Heartland Alliance, LUCHA, National Association of Consumer Advocates (NACA), Housing Action Illinois, Heartland Alliance,  Environment Illinois, Faith in Place Action Fund, Housing Action IL, Illinois Chapter of National Association of Consumer Advocates, Illinois Environmental Council, Illinois PIRG, Illinois Propane Gas Association, Jane Adams Senior Caucus, Kenwood Oakland Community Organization, Legal Action Chicago, Little Village Environmental Justice Organization, Low Income Utilities Project, LUCHA, National Consumer Law Center, Natural Resources Defense Council, Northwest Side Housing Center, ONE Northside, Physicians for Social Responsibility - Chicago Chapter, Power PAC, Shriver Center on Poverty Law, Sierra Club Illinois Chapter.             

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