On Aug. 1, the Illinois Commerce Commission held a public hearing on Peoples Gas’ proposed rate hike at the University of Illinois Chicago. After Peoples Gas executives laid out their plan and reasoning for the rate hike, several Chicago-based non-profits, organizing groups and residents lambasted the company for its mismanagement and corporate greed.
While Chicagoans are failing to pay bills and make ends meet, Peoples Gas has failed to meet its own deadlines for infrastructure updates. Now, after the threats of gas shut-offs and late fees have enabled Peoples Gas to have yet another year of record profits, they are proposing to expense the rest of the infrastructure project by increasing the average residential bill by $11.83 a month starting in January.
Peoples Gas’ proposed rate hike
Peoples Gas opened the hearing by positioning themselves as core to what it means to be Chicagoan. The company’s vice president of operational performance and compliance, Polly Eldringhoff, explained to the crowd, “We helped rebuild this city after the [Great Chicago] fire, and we have helped grow and redevelop every neighborhood in this city.”
Collectively, Peoples Gas’ opening comments were meant to deter critiques that the utility company is further exploiting working people. On the contrary, the utility framed itself as experiencing hardship despite record profits. Peoples Gas’ director of regulatory policy and local government affairs Tom Aridas, lamented, “Like anyone in this room who’s seen the rising costs in groceries, fuel to drive trucks or monthly rents, we too have seen rising costs.”
Aridas argued that the increase in monthly bills would be offset by the continued decrease in natural gas prices across the United States. However, the consumer watchdog group Illinois PIRG notes that the current projections for falling natural gas prices in 2024 are not guaranteed but are, instead, simply forecasts based on the best information available at the time.
What is known, though, is that Peoples Gas has continued to make record profits for multiple years. Peoples Gas made $208 million in profits in 2022, building on increasing profits for the sixth year in a row. Its parent company, WEC Energy Group, made $1.4 billion in profits in 2022. The proposed rate hike would rake in another $402 million for the company on top of this.
Working-class Chicagoans demand ‘No rate hike!’
While Peoples Gas argued that the rate hike would only increase monthly bills by $11.83, if at all, working-class Chicagoans argued that even this “small” increase would only further exacerbate disparities in access to energy and utilities across the city.
Lilly Scales, state director of the Illinois Clean Jobs Coalition, spoke at the forum, noting that “10 Chicago zip codes, all majority Black, accounted for 50% of Peoples Gas disconnections this summer” alone.
Ivonne Rychwa, outreach director for the Citizens Utility Board said, “I have talked to thousands of Chicagoans upset about their monthly bills. Peoples Gas wants the highest rate hike in Illinois history … In Englewood [a majority Back, working-class neighborhood], more than 40% of residents are behind on their bills. Think how bad it could get in the winter if this rate hike is approved.”
While almost 1 in 5 Chicagoans are behind in paying their bills, the majority of gas disconnections occur in predominantly Black communities. The Chicago Sun-Times notes that the rate of disconnections is three times higher in predominantly Black, Indigenous and Latino communities compared with predominantly white communities. An increase of $11.83 per month would only further increase the number of working-class Chicagoans of color already going without gas throughout the harsh, Midwest winters.
Others in attendance, like community member Mohammed Patel, argued that it is ridiculous to allow utility monopolies contracting with local or state governments to bring in the same profits that other companies would on the stock market. Patel told the ICC, “They are asking for a rate increase in their return on equity for 9.05% to 9.9%. The expected rate of return on the stock market is 10% … We should not be expecting them to make the average expected amount in the stock market.”
For elderly residents, this expectation for Peoples Gas to continue earning the same as other competitors is particularly harrowing. Phillippe Largent, representing the Illinois AARP, explained to the ICC that retired community members live on fixed budgets. Increasing their monthly bills would mean forgoing other necessary expenses. “No one should have to choose between buying groceries and heating their homes, but that’s what’s happened to countless seniors in Chicago,” he…
Read More: Working-class Chicagoans demand ‘No new rate hike’ at Peoples Gas public hearing