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Nicor settlement trims proposed increase, but northern Illinois gas customers still face higher bills
Illinois regulators approved an $81.6 million Nicor Gas rate increase expected to add about $26 a year to the average residential customer’s bill. The deal lowers the monthly fixed charge and requires the utility to examine alternatives to some pipeline replacements.
The Illinois Commerce Commission on Friday approved an $81.6 million rate increase for Nicor Gas, affecting about 2.3 million residential customers across northern Illinois. The increase is expected to raise residential bills by an average of about $26 a year, depending on gas use, while lowering the fixed monthly charge from $21.30 to $15.
The approved increase is 63% below the $220.8 million Nicor initially sought. It also falls $39 million short of the reduction consumer advocates had sought, who argued the company’s proposed spending would benefit shareholders at customers’ expense.
The settlement sets Nicor’s allowed return on investment at 9.48%, between the company’s requested 10.35% and the 8.95% proposed by advocates. Nicor also agreed to forgo executive incentive bonuses that had added $19.1 million to its original request.
The deal requires the utility to conduct a 10-year cost-benefit analysis of alternatives to replacing pipes on certain projects. Nicor will also hold informal workshops with advocates on whether pipe relining could be used for projects not covered by the settlement.
Commission Chairman Doug Scott said the agency must balance utility and consumer interests. “We recognize that any decision impacting Illinoisans’ bills is not a small one,” he said, adding that the commission was pleased the parties agreed to “strike excess charges.”
Nicor said its requested increase was largely tied to managing costs and investing in infrastructure to meet changing requirements. In a statement, the company said it understands that increases matter as families and businesses face rising costs, and said it would continue working to manage costs, connect customers with bill assistance and energy-efficiency resources, and maintain safe and reliable service.
Consumer advocates, including Illinois PIRG and the Citizens Utility Board, have criticized Nicor’s capital spending and profit margins. Illinois PIRG said the utility’s rates have risen 150% over the past decade through six rate increases. The group welcomed the commitment to assess pipe replacement alternatives but warned that continued investment in fossil-fuel infrastructure could leave customers paying for polluting systems for years.
A substantial number of customers are already behind on payments: Illinois Commerce Commission data show more than 163,000 households were at least 30 days late on a combined $38 million in bills, without a deferred payment arrangement.
The decision follows a separate $168 million Nicor rate increase approved in November 2025. That increase raised average monthly bills by $4.25 and was 47% below the company’s original request.