The Citizens Utility Board (CUB) has been handling a steady stream of calls from frustrated gas customers wondering why they’re on the hook to pay hundreds of dollars more to heat their homes—and Chicago is the epicenter of this heating-affordability crisis.
“I have not used any more service, but the bill gets bigger and bigger,” Mary, a Peoples Gas customer, wrote to CUB. “I can't afford to pay at the rate they are raising it and can't stay in my house with no heat…This is outrageous and unacceptable.”
She’s not alone in her stress: Statistics filed with state regulators indicate that an alarming number of Chicagoans are having a hard time affording their bills. In December, more than one in four Peoples Gas customers (26 percent) were assessed late fees for failure to pay on time, and about 17 percent were behind on their heating bills, by an average of about $576.
Peoples Gas blames the high bills on a “nationwide price spike,” and it’s true that such periodic spikes are built into the fossil fuel business model. But Peoples’ explanation ignores years of overly aggressive spending by the utility that is causing real hardship for their customers.
Under law, Illinois’ gas utilities don’t profit off high supply prices. But they do profit off delivery rate hikes—and the utilities in recent years have been on a rate-hike spree. Suburban Nicor Gas, for example, has raised delivery rates by 77 percent—more than $500 million—in just four years.
And here in Chicago Peoples Gas has been taking advantage of a 2013 law that allows gas utilities to increase a surcharge, the Qualifying Infrastructure Plant (QIP) charge, on our bills without prior regulatory approval.
Supporters of the 2013 legislation claimed the QIP would only cost Peoples Gas customers about $13 a year, but they are now paying an average of more than $13 a month, on track to pay $150 a year.
For years CUB and other consumer advocates have been sounding the alarm about the company’s troubled QIP program, which a 2015 state audit concluded was poorly managed. One review showed projected pipe-replacement costs had 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.
So what can we do? For starters, we’ve set up CUBHelpCenter.com, a free online resource (also available in Spanish) that explains your options for bill assistance, outlines your rights against disconnection and offers safety and energy efficiency tips.
But there’s a lot more to do—and these items should be at the top of the list:
The General Assembly needs to rein in Peoples Gas. CUB is fighting in Springfield for the Heating Affordability & Utility Accountability Act (HB 3941/SB 570). Sponsored by state Rep. Joyce Mason and state Sen. Cristina Castro, it would end the QIP charge, which for years has allowed Ameren, Nicor and Peoples Gas to circumvent the traditional regulatory process to rake in revenue more quickly. “If they can get rid of that surcharge that would be a tremendous help to my family,” said Donna, a Peoples Gas customer, at a recent news conference.
Peoples Gas and other utilities need to step up this winter. Their parent companies are making billions of dollars in profits, so they should lead the way, contributing shareholder money to energy assistance programs at an unprecedented level. Plus, they should do everything they can this winter to offer struggling customers energy assistance and friendly payment plans to help them stay connected. (If you’re having trouble, it’s vital that you contact your utility to find out what your options are. Keep the lines of communication open.)
- We must begin planning now for the transition away from fossil fuels. If we stay with natural gas, it will continue to burn us. But there is hope: CUB just did a study that found that Chicago households that “cut the pipe” and shift from gas to highly efficient electric heat would enjoy lifetime savings ranging from $24,716 to $47,104. In total that could potentially generate between $25 billion and $29 billion in cumulative savings for Chicago residents over the next three decades.
Of course, transitioning to a better way to heat our homes is not a quick fix–but that’s why Chicago needs to start planning now. The status quo with natural gas is unsustainable—both financially and environmentally. This is an excellent opportunity for Chicago: The City can meet its important climate goals (100 percent renewable energy in all buildings in decades to come), protect its residents from out-of-control energy costs and give residents a healthy, affordable alternative to heat their homes.
So it’s time to act. If you’re dreading what your gas bill has in store for you after the latest blast of wintry weather, please contact your legislators and let them know we need to do something about this crisis now.
It’s time to support gas customers; it’s time to rein in the big utilities; and it’s time to start moving toward a cleaner, more affordable heating future.
David Kolata is executive director of the Citizens Utility Board (CUB). CUB is a utility watchdog group dedicated to fighting for clean, affordable energy for all Illinois consumers.
- The General Assembly needs to rein in Peoples Gas. CUB is fighting in Springfield for the Heating Affordability & Utility Accountability Act (HB 3941/SB 570). Sponsored by state Rep. Joyce Mason and state Sen. Cristina Castro, it would end the QIP charge, which for years has allowed Ameren, Nicor and Peoples Gas to circumvent the traditional regulatory process to rake in revenue more quickly. “If they can get rid of that surcharge that would be a tremendous help to my family,” said Donna, a Peoples Gas customer, at a recent news conference.
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