Ameren Illinois, which has about 800,000 downstate customers, requested an increase that translates to between $8 to $10 higher monthly bills for a typical residential customer.
by Andrew AdamsCapitol News Illinois
Critiques from consumer groups
The Citizens Utility Board, a consumer watchdog group, filed written testimony this month in both cases arguing that the requests should be cut — Nicor's by about 36% and Ameren's by about 42%. Other groups, like the Illinois attorney general’s office, the Environmental Defense Fund and others argued for additional cuts in their own filings.
Abe Scarr, director of the consumer advocacy group Illinois PIRG, said the companies are requesting “long-term commitments” in paying for gas system infrastructure, despite the potential for decreasing demand for fossil fuels.
For Ameren, much of the contention comes from the company’s plan to upgrade its natural gas system.
“The more expensive their infrastructure investments, the more opportunity they have to profit,” Scarr said. Because utility profits are regulated by agencies like the ICC, there is a financial incentive to invest in infrastructure so that more funds can be “recovered” from customers — a portion of which then go to shareholders. That rate of return is one of the things being litigated in these rate cases. Both companies requested a bump in their allowed “return on equity,” which translates to the amount paid to shareholders. In recent years, the ICC has consistently rejected utilities’ requests for higher return rates, although they have approved some modest increases. “You’re asking us to predict what those shares are worth next year? Next month is gonna be hard,” CUB’s general counsel Eric DeBellis said. DeBellis said the companies overstepped in other areas of their requests as well, including costs associated with rate cases and post-employment benefits as well as an accounting irregularity worth millions of dollars that Ameren has already admitted was erroneous. He noted that Nicor included tens of millions of dollars of projects that were rejected by the ICC in the company’s rate request two years ago, a move that DeBellis called “galling.”
Environmentalists question future of gas
The companies drew criticism from some environmentalists, who argued in testimony this month that investing in natural gas infrastructure as the state — and country — move away from fossil fuels could leave customers on the hook for the bill for decades.
Curt Stokes, a senior attorney at the Environmental Defense Fund, said he's concerned that gas companies are building out new gas infrastructure in a way that “locks us in and keeps us hooked on fossil fuels for our energy needs.”
For Ameren, much of the contention comes from the company’s plan to upgrade its natural gas system, a plan that company officials say is required by federal safety rules. But critics point out that Ameren frequently chooses to totally replace pipes — the most expensive and most profitable option — instead of cheaper alternatives like testing them for safety.
But Ameren officials defend the choice as being the only option to ensure compliance with federal rules.
They certainly have not demonstrated, and there’s lots of — lots of — reasons to be skeptical, that there’s any environmental benefit.
“The investments we have proposed in our reliability plan will enable us to meet strict federal pipeline safety requirements, reduce leaks, and provide reliable and affordable natural gas service for our residential and business customers,” Brad Kloeppel, Ameren’s senior director of gas operations, said in a statement. “We evaluate all methods available for each segment of pipe subject to compliance based on cost and operational feasibility." Meanwhile, advocates have criticized Nicor’s efforts at lessening greenhouse gas emissions. The utility requested to make permanent a pilot program called “TotalGreen,” a voluntary effort that allows customers to pay to offset their carbon footprint through a mix of “renewable natural gas” and investments in methane capture and forest conservation. “They certainly have not demonstrated, and there’s lots of — lots of — reasons to be skeptical, that there’s any environmental benefit,” Scarr said. The EDF, Illinois PIRG and the Environmental Law and Policy Center argued in a joint filing that the “TotalGreen” program fails to live up to the state’s clean energy goals. Among other reasons, the groups’ testimony said it costs more than $2,400 per person and has only offset the equivalent of 0.0031% of the company’s yearly carbon footprint. Jennifer Golz, a Nicor spokesperson, said the program “supports the state’s broader environmental objectives on the path to a sustainable future.” “Nicor Gas supports our parent company, Southern Company Gas, in its goal to achieve net zero direct greenhouse gas emissions from its operations by 2050,” Golz said in an email. “We also support reducing emissions across the natural gas value chain, from gas production to transmission to end uses.” TotalGreen is one of several projects outlined in the two rate cases which use “renewable natural gas,” a term for methane that is captured from landfills, wastewater treatment plants and farms that would have otherwise been released into the atmosphere. Stokes said there were “too many open questions” about renewable natural gas programs for the EDF to support the initiatives, but he was optimistic about some of the companies’ other proposals. “There are good signs in these cases that Nicor and Ameren are looking to be more innovative,” Stokes said. He pointed specifically to Nicor’s energy efficiency programs and a proposal for a pilot program at Ameren which would allow communities to transition from natural gas to electric all at once as pipes need to be replaced or retired.
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
CHICAGO -- Forecasters are predicting another season of cold, wet weather for Illinois and the upper Midwest this winter, which could bring some high energy bills.
The National Weather Service, the National Oceanic Atmospheric Administration, and the Old Farmer's Almanac are all calling for a snowier-than-usual season, with major storms possible in January and February.
Illinoisans are being advised to take steps now to make their homes and businesses more energy-efficient.
Whitney Hayes, research analyst for the nonprofit advocacy group Elevate, said folks who heat with gas should prepare to dig deep into their wallets.
"There's a couple of things going on with gas prices, one of which is the cost of gas itself," Hayes pointed out. "And so, that does fluctuate depending on the market and depending on what's going on in the world. I mean, gas prices globally are up, it's not just the U.S."
The nonprofit Citizens Utility Board said natural gas prices have doubled or tripled in the past two years, and gas futures just hit a 14-year high. Analysts estimate for November through March, natural gas customers can expect to pay between $1,200 and $1,400 to heat their homes.
Hayes pointed out homeowners could save a significant amount on their energy bills and cut greenhouse gas emissions by switching to electric appliances. While it is not something everyone can afford, she stressed making even minor changes can cut costs.
"Even small things like making sure that there's air sealing around windows and doors, electrical sockets," Hayes outlined. "Even those things can add up when you kind of seal it in -- almost 10% of energy savings -- by doing those small little things."
Hayes added higher gas bills are often a result of regulators allowing utilities to pass along cost increases they incur in what they pay for gas, and the cost of maintaining and expanding the equipment they use to deliver it. She explained both can increase a ratepayer's bottom line.
"In the U.S., and especially in the Illinois-Chicago area, there's a lot of infrastructure costs that people are paying for," Hayes noted. "Gas companies have made all these plans to improve the infrastructure, so that gets funneled down into people's bills."
Reports are pointing to an 8.9% raise for Social Security recipients. While it won’t feel like enough, it may buy you a sack of groceries or a tank of gasoline. This is a big maybe on the gasoline as California reports prices of over $8 per gallon.
Some of our government leadership is crying because Saudi Arabia is cutting their oil production by 2 million barrels a day. This means less oil for everyone in the grand oil supply pool. I don’t understand why anyone in our government would want to do business with the Saudis.
Buying oil from Saudi Arabia, Venezuela or any foreign entity is crazy. Why don’t we use our own oil? I’m all for green energy but we aren’t quite there yet. Make electric cars and drive them. Utilize solar energy and else anything that we can to help preserve this planet and its resources. Regardless, our country still needs oil. As long as we need oil, it would be wiser and much more cost effective to use our own oil. Put Americans back to work drilling our oil and selling it to foreign countries.
Our government has been draining our own oil reserve to try to keep the price of gasoline down. This doesn’t seem to be working very well. Plus, it puts our country at risk. When China and Russia decide to attack us, we need to be able to put fuel in our jets and ships. That would not be a good time to have to go back to Saudi Arabia and beg for oil.
We should utilize a full arsenal of energy from electric cars and a grid to supply the power. Utilize our oil, wind, natural gas and coal. Once our country can do everything without oil or coal, then we can move on from those resources. Being dependent on getting them from foreign nations doesn’t make sense, especially when we have the resources.
A loaf of bread will eventually cost Americans their 8.9% Social Security increase. Ukraine has been one of the world’s leading providers of wheat. Having Russia in control of Ukraine, a major source of the bread supply, along with their major supply of natural gas is bad news for the world.
The Crimea bridge that was recently bombed between Russia and Ukraine should have been bombed on day one by Ukrainians. Ukraine must do whatever it takes to thwart Russia’s ongoing destruction of their country. The news has been filled with fear that Russia will go nuclear in their efforts. When the nations start hurling nuclear bombs you won’t need to worry about gas, groceries and cost of living adjustments because this planet can only take so much.
Keep in mind there is still something you can do to make a difference – vote. Clear your calendar for voting. If you don’t vote then don’t complain about our government, inflation, rising interest rates, gasoline prices and more. I know it doesn’t feel like your one vote matters, but it truly counts. The only way you can bring about change is to clear your schedule, take the time, and vote.
