Illinois Regulators Approve Reduced $82 Million Nicor Gas Rate Increase

The Illinois Commerce Commission approved a settlement between Nicor Gas and Illinois Attorney General Kwame Raoul's office that cuts the utility's proposed rate increase from $221 million to about $82 million, Yahoo reported. Residential gas delivery costs will rise by an average of $2.21 per month beginning in January.

Nicor Gas Settlement Details

The $221 million proposal would have raised residential gas rates by about $6 per month beginning in 2027, the utility said. Nicor said in a statement Thursday: "We understand that any increase matters, particularly as families and businesses manage rising everyday costs." The company added that it remains focused on managing costs responsibly, connecting customers with bill assistance and energy-efficiency resources, and making infrastructure investments needed to serve Northern Illinois safely and reliably.

The initial request sought to fund infrastructure projects including the replacement of old equipment and 45 miles of distribution pipeline, plus repairs to more than 400 miles of transmission pipeline, the utility said. The attorney general's office opposed the increase, alleging Nicor overstated its forecast capital spending program and inflated an accounting mechanism to bolster profits. As part of the settlement last month, Nicor agreed to a reduction in the profit it is allowed to make on its infrastructure investments and separately agreed to protect union jobs through 2027.

Illinois PIRG was among consumer groups that signed onto the revised rate agreement but did not support the supplemental agreement between the attorney general's office and the utility to preserve union jobs next year. "A settlement is a compromise, so we're not thrilled about every element, but we are pleased the Commission approved it," Abe Scarr, director of Illinois PIRG, said in a statement. In its ruling Thursday, the ICC said agreements similar to the employment stipulation "should not come before the commission" in the future.

Nicor Gas at a Glance

Nicor Gas is a regulated natural gas distribution utility serving 2.3 million residential, commercial, and industrial customers across northern Illinois through a 34,000-mile pipeline network and eight underground storage facilities, according to akta.pro company records. The company operates as a wholly-owned subsidiary of Southern Company Gas and is headquartered in Naperville. Its underground storage facilities have 150 billion cubic feet of annual capacity, with the Troy Grove facility accounting for approximately one-third of that capacity.

Earlier Nicor Gas Rate Negotiations

Nicor Gas agreed in September 2026 to cut its proposed rate increase by $140 million, from $221 million to $82 million, in a settlement with Raoul, the Chicago Tribune reported. That reduction would add $2.21 per month to average residential bills, pending ICC approval. The Cool Down reported that same month that the settlement with Raoul's office and consumer groups would cut 63% from the proposed increase, lowering the average monthly increase from about $6 to $2.

What Comes Next for Illinois Gas Rates

The ICC is expected to rule next month on a proposed $144 million Peoples Gas rate increase, which the utility itself reduced from an initially requested $202 million. Earlier this month, two ICC administrative law judges issued a proposed order recommending the commission cut the requested Peoples Gas increase down to $66 million. Peoples Gas, owned by Milwaukee-based WEC Energy Group, serves more than 898,000 customers in Chicago.