Make natural gas utilities more accountable to customers and the state
It’s unfair and costly to consumers to allow gas companies to get away with not providing basic transparency and safety information to consumers and regulators.
As recent inflation has made basic necessities like food, clothing and shelter more expensive, Illinois consumers have experienced the additional burden of rising natural gas prices to heat our homes and businesses. Inflated natural gas prices are driven by several factors, including Russia’s war on Ukraine, but it is also driven up by outsized spending from our gas utilities.
Illinois utilities want a combined $900 million in rate increases this year alone, and if no action is taken to stop it, Illinois ratepayers could be left footing the bill.
Worse, rising natural gas prices often go unchecked because of the lack of consumer protection regulations that hold gas utilities to account. With the passage of the Climate and Equitable Jobs Act (CEJA) 18 months ago, electric utilities were forced to accept additional consumer rate protections enforced by the Illinois Commerce Commission (ICC), but unfortunately gas utilities were left untouched.
Now, the skyrocketing and unpredictable natural gas market will cause well-resourced consumers to install electric heat pumps or build electric heated homes. Those who make the switch will be protected by the regulatory authority of the ICC, which can require transparency and accountability when it comes to prices consumers pay for electricity.
But those who cannot afford to make the shift and remain reliant on natural gas — most of whom are lower-income Black and Brown people and rural residents in Illinois — will have almost no regulation on prices charged by their utilities. The cost to consumers will continue to rise if we leave unchecked the gas utilities’ desire to charge consumers an ever increasing amount for expansion of their natural gas infrastructure.
It’s unfair and costly to consumers to allow gas companies to get away with not providing basic transparency and safety information to consumers and regulators. During this legislative session we need to adopt a number of measures that will protect gas customers.
To hold gas utilities accountable and protect consumers, we should enact new laws requiring:
- An audit of the gas distribution infrastructure, so we know how our money has been spent in the last decade;
- Gas distribution planning, so the ICC can better rule on which expenses are necessary;
- Safety standards for gas pipes and distribution, so we can accurately determine what must be replaced and we don’t end up replacing infrastructure unnecessarily.
- An end to the qualified Infrastructure Plant (QIP) charge on consumer bills, which is costing customers as much as $40 per month even with little or no gas usage;
- Energy efficiency programs must be adopted for gas utilities, as they are on electric utilities;
- Require utilities to offer lower rates for low-income customers, so they can get additional relief;
- Allow the ICC to require gas companies to maximize federal funds, so we can minimize the burden on Illinois ratepayers;
- Have performance-based regulations for gas utilities, as we have for the electric utilities, so we can ensure the gas companies’ profits are as promised in the rate making process;
- Pay for the system using volumetric rates, not customer charges — so those who use more gas pay more;
- Improve compensation for intervenors (those who advocate on behalf of consumers in rate cases);
- Initiate new protections against shut-offs and additional payment plan mechanisms.
This problem isn’t just an economic one for consumers. It is also an environmental issue, as natural gas distribution causes emissions of greenhouse gasses and other pollutants. That requires us to explore decarbonizing the way we heat our homes and businesses.
Legislators and stakeholders must come together to require gas companies to be more accountable to consumers and the ICC. We can and must act now to make these changes to provide relief to ratepayers.
In Illinois, we have successfully tackled large energy issues in the past by letting our values guide our policy and focusing on what’s best for all our people. It’s time to do it again on natural gas.
J.B. Pritzker is the governor of Illinois.
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