Illinois Commerce Commission Approves Robust Discounted Utility Rates

November 16, 2023 — Press Release

Income-Based Utility Rates Will Help Financially Struggling Gas Utility Customers Across Illinois and Offer Powerful Model for Other States

CHICAGO – The National Consumer Law Center (NCLC), its client, Community Organizing and Family Issues (COFI), and Legal Action Chicago (LAC) today applauded three decisions issued by the Illinois Commerce Commission that, for the first time in Illinois’ history, approved robust, discounted utility rates based on a customer’s income for financially struggling gas utility customers across the state.

“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.”  

In the rate orders issued in the Peoples Gas Light & Coke Company, North Shore Gas Company, and Nicor Gas Company cases, the Commission specifically adopted the NCLC/COFI/LAC-recommended discount rate approach, which creates a five-tiered, income-based discount applied to the whole bill. The recommended discounts were based on a specific analysis conducted by utility affordability expert Roger Colton, who set the discounts with the goal of ensuring customers pay no more than 3 percent of their monthly income toward heating bills. A similar five-tiered discount rate was also approved in the Ameren Gas case. 

In addition to creating the new discounts, the decisions reduced the percentage of revenues recovered through the flat customer charge for each of the utilities, which will help ensure that customer efforts to reduce energy usage through energy efficiency investments pay off through lower bills.

“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 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.

NCLC, COFI and LAC also applaud the Commission’s decisions to specifically reduce the proposed rate increases filed by Peoples Gas, North Shore Gas, Nicor Gas, and Ameren Gas, consistent with specific recommendations made by Illinois Attorney General Kwame Raoul. In addition, the orders will ensure that future gas infrastructure planning is focused on ensuring the safety and reliability of the system, rather than the existing accelerated investment approach that increases customer rates and extends the life of a gas utility model that is inconsistent with the state’s clean energy goals.