Eye On Illinois: Competing interests create difficult balancing act for utility regulators

If nothing else, the Illinois Commerce Commission’s Thursday vote offered a lesson in spin control.

Commissioners allowed Peoples Gas to increase customers’ bills about $6 per month so it can collect an extra $300 million. Steep, right? But there is widespread praise because members didn’t rubber stamp the actual request of a $402 million bump, about $11.83 per month per ratepayer.

In fact, ICC members went a step further than the commission’s own administrative judge, who proposed allowing a $350 million increase. They took similar action against three other utilities that, with Peoples, serve 98% of the state’s gas customers.

“Commissioners lowered Ameren’s initial ask by about 50.8% and cut Nicor’s request by 30.3%,” according to Andrew Adams, of Capitol News Illinois. “For Peoples Gas, it was a 25% reduction, and for its sister company North Shore, regulators cut the request by 34%.”

It’s not surprising the price of gas is rising – the cost of pretty much everything increases over time – and although it’s not fair to lump these utilities in with Exelon, Commonwealth Edison and the bribery scandal that brought down one of the country’s most powerful politicians, that’s part of the current climate in which the ICC considers the request.

It all informs the context for quotes like the headliner from Abe Scarr, director of a consumer advocacy group call Illinois PIRG: “This was an earthquake in Illinois utility regulation.”

Scarr was talking about more than just throttling rate hikes. The commission reduced requests for spending on infrastructure, suggesting not enough proof the rate jumps would be needed to keep current safety levels, while also singling out Peoples Gas for a modernization problem that is both behind schedule and over budget. And there are new policies in place to make gas more affordable to households that meet certain low-income standards (effective in October 2024).

Any time a utility is accountable to investors, customers will fairly wonder where they rank among corporate priorities and if the company merely passes along cost increases. It’s true utilities often have costs they can’t control, and their role as providers of quality employment is significant. But those and other factors – we haven’t even mentioned evolving environmental concerns – are reasons the state created a regulatory system, with a presumption ICC commissioners will work (to the extent possible) to balance all competing interests.

Complex is an understatement. I considered mapping Illinois’ issues onto a story from the Portland Press Herald about Maine voters this month soundly rejecting a referendum for a public takeover of investor-owned utilities, but there are so many nuances in that situation the main takeaway was being reminded it’s between difficult and impossible to solve utility issues such that all parties are content.

• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.