Latest news with #AbeScarr
Yahoo
07-05-2025
- Business
- Yahoo
CONSUMER ADVOCATES URGE REGULATORS TO CUT NICOR'S RECORD RATE HIKE BY MORE THAN HALF; DECRY EXCESSIVE PROFITS, WASTEFUL EXECUTIVE BONUSES
CHICAGO, May 7, 2025 /PRNewswire/ -- Nicor Gas' bid for a record-breaking $308.6 million rate hike is rife with excesses and should be slashed by more than half, according to testimony submitted to state regulators by the Citizens Utility Board (CUB), Illinois PIRG, Environmental Defense Fund (EDF), and other consumer advocates. Citizens Utility Board Logo (PRNewsfoto/Citizens Utility Board) CUB warned the Illinois Commerce Commission (ICC) that more than $111 million in the rate hike proposal – including a lavish profit rate for Nicor shareholders and wasteful spending on executive bonuses – doesn't pass legal muster and should be rejected. When the Illinois Attorney General's recommendations are taken into consideration, the requested cuts surge to nearly $153 million, according to testimony filed by the state's chief legal officer. And that total still doesn't account for all of the reductions identified by other parties in the case. Nicor's proposal would represent the largest rate hike for a gas utility in Illinois history. "This testimony exposes Nicor's bald-faced attempt to capture exorbitant shareholder profits–an all-too-familiar theme for the utility's customers who have already suffered from exorbitant rate hikes in recent years," said CUB Executive Director Sarah Moskowitz, who urged Nicor customers to sign a petition against the rate hike at . "We urge the ICC to stand up for Nicor customers and slash the utility's request for a record rate hike." This is Nicor's fifth rate-hike request since 2017. Between 2017 and 2024, the utility has raised delivery rates by 114 percent, totaling $747 million, and its parent, Southern Co., has raked in $25.2 billion in profits. "It's time for Nicor to move beyond business-as-usual practices that have already more than doubled its rates in under a decade," said Illinois PIRG Director Abe Scarr. "By considering alternatives to new fossil fuel infrastructure, Nicor can maintain system integrity while reducing rate increases and facilitating the transition to safer, cleaner energy." "In 2023, the Commission warned Nicor it would need to plan for a gas system that meets Illinois decarbonization goals. Two years later, that change is not happening fast enough," said EDF Senior Attorney Curt Stokes. "EDF, along with our allies, has filed testimony charting a better course. It is our hope that Nicor will take our suggestions seriously and update its plan; if not, we will ask the Commission to order them to." Experts sponsored by Illinois PIRG and EDF analyzed Nicor's proposals and asked the Commission to reduce planned gas-pipeline spending by more than $80 million, because Nicor failed to adequately consider alternatives such as repairs or "non-pipeline alternatives" like targeted electrification.
Yahoo
01-04-2025
- Business
- Yahoo
Illinois homeowners insurance premiums up 50% over three years, according to new report
While homeowners insurance premiums have been rising sharply in the post-pandemic landscape across the U.S. — from wildfire-ravaged California to hurricane-flooded North Carolina — rates are increasing faster in Illinois than all but one other state. A new report released Tuesday by the Consumer Federation of America showed homeowners premiums increased nationally by an average of 24% over the past three years, driven in large part by climate change-related weather events. But beyond the extreme weather coastal hotspots that garner so much attention, rates in Illinois went up 50% between 2021 and 2024, second only to Utah, which saw a 59% increase, according to the report. 'A lot of the focus and attention has been on the coast, and understandably so, and there are big problems there, but a lot of the actual losses in extreme weather are happening in every part of the country, including here in the Midwest,' said Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization. Scarr, who participated in a CFA news conference Tuesday, pointed to the annual report filed by Allstate with the Securities and Exchange Commission in February, which showed wind/hail and tornado damage represented 79% of the catastrophic losses for the Northbrook-based insurance giant last year. Nationwide, insurance companies have increased premiums in 95% of U.S. ZIP codes between 2021 and 2024, according to the CFA report. Florida saw the greatest dollar increase in annual premiums, up an average of $2,118, and remains the most expensive state to insure a home at $9,462 per year, the report found. The average annual premium nationwide is $3,303, according to the study. Illinois is in the middle of the pack in terms of annual cost to insure a home at $2,942, but the 50% rate increase over three years is a 'worrisome' trend, Scarr told the Tribune. In addition to Utah and Illinois, the states with the greatest three-year percentage increase in premiums were Arizona at 48% and Pennsylvania at 44%. After Florida, the states with the biggest dollar hikes in premiums were Louisiana at $1,775 and Kentucky at $1,426, according to the report. Nationally, the CFA study found the 24% average home insurance rate increase more than doubled the 11% cumulative inflation between 2021 and 2024. The report cited the cost of building materials and labor in the post-pandemic economy, stronger and more frequent extreme weather events and the unregulated global reinsurance market — insurance for the insurance companies — as the prime drivers of rate increases that have created an affordability crisis for homeowners. In addition to the economic and meteorological factors, the political climate also contributes to home insurance rate increases, where 'state regulators generally do not adequately review insurance rate increases and determine if they are excessive,' according to the CFA report. That problem may be particularly acute in Illinois, according to Scarr. 'It's far easier to raise rates here in Illinois than anywhere else, because they don't have to ever justify their rate increases and don't have any threat that their rate increase will be rejected or modified by regulators,' Scarr said. Illinois PIRG supports legislation pending in Springfield that would regulate home and auto insurance rates to not be 'excessive, inadequate or unfairly discriminatory,' but Scarr is not particularly optimistic about its prospects for passage. Meanwhile, Allstate increased homeowners insurance rates in Illinois by 14.3% beginning in February. Last year, Allstate raised homeowners insurance rates in Illinois by 12.7%, while Bloomington-based State Farm implemented a 12.3% increase in May. Unfortunately, Illinois homeowners socked with double-digit annual insurance premium increases may have little recourse other than to shop around for the best rates and perhaps reinforce their property to better weather upcoming storms, Scarr said. 'Ultimately, this is why we do need some more regulation, because it's just not something that individual policyholders have the power to do all on their own,' Scarr said. 'We think the state has a responsibility to protect consumers.' rchannick@
Yahoo
20-02-2025
- Business
- Yahoo
State regulators order Peoples Gas to finish pipeline replacement by 2035
After a yearlong review, state regulators Thursday gave Peoples Gas the green light to resume its long-running, multibillion-dollar pipeline replacement program, but with a narrowed focus, accelerated timeline and greater accountability. The order, unanimously approved by the Illinois Commerce Commission, directs the utility to retire the remaining 1,000 miles of aging leak-prone cast iron and ductile pipes running under Chicago by 2035. A safety monitor will oversee and report on Peoples' progress annually beginning in 2027, with the threat of civil penalties if the company 'fails to comply with the completion deadline,' according to the order. But the ICC did not sign off on a broader $7.2 billion proposal by Peoples to modernize its entire system by 2040, which included upgrading to medium pressure and moving gas meters outside homes. Instead, the utility will need to prioritize the pipeline replacement and justify the work in its annual rate hearings to recover the costs. Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, hailed the decision as a victory for Peoples Gas customers that will help hold down future rate hikes associated with an infrastructure program that had expanded far beyond its initial mission. 'By refocusing Peoples Gas on cost-effective investments to mitigate safety risks, the ICC has directed Peoples Gas to run a program that costs less, makes us safer, and facilitates the transition to cleaner energy,' Scarr said in a news release. Consumer groups have long argued that the utility should focus on repairing and replacing the most vulnerable leak-prone pipes, while Peoples has incorporated a broader system upgrade that has taken years longer and cost billions more than originally projected. In the wake of the decision Thursday, Peoples Gas suggested the ICC order to speed up the process and focus entirely on pipeline replacement may prove more expensive and disruptive in the long run. 'This direction given by the Commission, compared to the prior approach, may necessitate additional cost and more construction sites disrupting streets across city neighborhoods,' Peoples Gas said in a statement. Peoples Gas has a subterranean network of some 4,600 miles of pipes under the city, including significant stretches of original cast and ductile iron — some dating back to the 1800s — which pose a risk of gas leaks that could lead to an explosion. Launched in 2011, the Safety (formerly System) Modernization Program to replace the aging iron pipes was projected at inception to cost $2.6 billion and take 20 years to finish. Plagued from the outset by delays and budget overruns, the program has already cost $3.3 billion and is just 38% complete, according to the utility. About 1,078 miles of the leak-prone cast and ductile iron pipes remain, Peoples Gas spokesperson David Schwartz said Thursday. Initially funded by a 10-year legislative rider enabling the utility to automatically pass the costs along to customers, the pipeline program was paused by the ICC last year for an investigation to determine the best path forward after the surcharge expired at the end of 2023. In November, two Illinois Commerce Commission administrative law judges issued a proposed order recommending Peoples Gas resume and finish the work — including the upgrade to medium pressure and meter relocation — by 2035, at a projected additional cost of $7.2 billion. The recommended plan, which was based on the preferred option suggested by Peoples Gas during the review process, would have put the total price tag of the program at $10.5 billion, with the utility's 891,000 Chicago customers bearing the cost through their monthly bills. Some consumer advocates believe the actual price would have been even higher. In October, the Citizens Utility Board released a Groundwork Data report it commissioned warning that completing the pipeline replacement program would actually cost another $12.8 billion, topping the utility's projections by more than $5 billion. The report concluded Peoples Gas would need to impose record-breaking 7% annual rate increases over the next 15 years to cover that cost, effectively doubling delivery charges for its customers. The long-running replacement program was driven by pressure from the administration of former President Barack Obama to hold utilities across the U.S. accountable for aging pipeline systems following a 2010 explosion in San Bruno, California, that killed eight people, injured 58 and destroyed 38 homes. But consumer advocates have argued for years that gas pipelines may be obsolete by the time Peoples completes the systemwide infrastructure upgrade, as the shift to electrification and renewable energy sources, such as wind and solar, gain traction. The new ICC order directs Peoples to retire all old cast iron and ductile pipe under 36 inches in diameter by 2035. During the review process, Peoples said that larger cast iron pipe in the system has a longer remaining life than smaller diameter pipe. While the order didn't preclude other system improvements, finding that 'moving from a low-pressure to a medium-pressure system can offer improvements in safety and operational efficiency,' it nonetheless directs Peoples to focus on getting the old iron pipes out, and also 'declined to prioritize' meter relocation work. After years of budget overruns, delays and expanding scope, Scarr is hopeful that the refocused pipeline program will finally get the job done for Peoples Gas customers and the city. 'It should be less expensive for customers and get better outcomes,' Scarr told the Tribune. rchannick@
CBS News
20-02-2025
- Business
- CBS News
Illinois state regulators rein in Peoples Gas pipeline replacement program
The Illinois Commerce Commission voted on Thursday to allow Peoples Gas to resume a controversial pipeline replacement program, but with some big changes aimed at streamlining the project and saving customers money. The ICC said the expansive project can't come at an unreasonable cost to customers, who have been upset about rising gas bills in recent years. Consumer advocates had said the nearly $13 billion proposal project – which was billions over budget and years behind schedule could have led to record-breaking rate hikes over the next 15 years if the ICC hadn't stepped in to force Peoples Gas to scale it back. Utility watchdogs said customers shouldn't expect a big change in their bills right away, but the ICC's decision should rein in future rate hikes at Peoples Gas. "Essentially, what we saw today is the regulators deciding to regulate, and that's what we wanted," said Sarah Moskowitz, executive director of the Citizens Utility Board, a non-profit utility watchdog that fights rate hikes. Last year, CUB released a report showing that if Peoples Gas was allowed to continue spending at its current rate, the pipe replacement program would cost an additional $12.8 billion to finish, doubling the amount customers pay for gas by the year 2040. Peoples Gas has said the pipeline replacement program is necessary because so many of their pipes are past their useful service life. There are currently more than 1,100 miles of dangerous, old, deteriorating natural gas pipes in Chicago that need to be replaced — some dating back as far as the 1800s — prompting Peoples Gas to spend billions of dollars on what is known as the "Safety Modernization Program" to replace them, and in return sending gas bills climbing. But in November 2023, due to delays, the project going way over budget, and concerns that the program was not properly prioritizing addressing safety risks, the ICC paused the program and ordered an investigation. On Thursday, the ICC ruled that the program can finally resume, but must refocus to specifically address the retirement of these aging pipes by the year 2035. "On the whole, I think it's pointed the program in a better direction, refocusing on the core safety risks that the program always should have been about, and should be about going forward," said Abe Scarr, director of the Illinois Public Interest Research Group, a nonprofit consumer advocacy group. In a statement, Peoples Gas said this new focus ordered by the ICC might actually increase costs for them, and result in "more construction sites disrupting streets across city neighborhoods."
Chicago Tribune
20-02-2025
- Business
- Chicago Tribune
State regulators order Peoples Gas to finish pipeline replacement by 2035
After a yearlong review, state regulators Thursday gave Peoples Gas the green light to resume its long-running, multibillion-dollar pipeline replacement program, but with a narrowed focus, accelerated timeline and greater accountability. The order, unanimously approved by the Illinois Commerce Commission, directs the utility to retire the remaining 1,000 miles of aging leak-prone cast iron and ductile pipes running under Chicago by 2035. A safety monitor will oversee and report on Peoples' progress annually beginning in 2027, with the threat of civil penalties if the company 'fails to comply with the completion deadline,' according to the order. But the ICC did not sign off on a broader $7.2 billion proposal by Peoples to modernize its entire system by 2040, which included upgrading to medium pressure and moving gas meters outside homes. Instead, the utility will need to prioritize the pipeline replacement and justify the work in its annual rate hearings to recover the costs. Abe Scarr, director of Illinois PIRG, a nonprofit consumer advocacy organization, hailed the decision as a victory for Peoples Gas customers that will help hold down future rate hikes associated with an infrastructure program that had expanded far beyond its initial mission. 'By refocusing Peoples Gas on cost-effective investments to mitigate safety risks, the ICC has directed Peoples Gas to run a program that costs less, makes us safer, and facilitates the transition to cleaner energy,' Scarr said in a news release. Consumer groups have long argued that the utility should focus on repairing and replacing the most vulnerable leak-prone pipes, while Peoples has incorporated a broader system upgrade that has taken years longer and cost billions more than originally projected. In the wake of the decision Thursday, Peoples Gas suggested the ICC order to speed up the process and focus entirely on pipeline replacement may prove more expensive and disruptive in the long run. 'This direction given by the Commission, compared to the prior approach, may necessitate additional cost and more construction sites disrupting streets across city neighborhoods,' Peoples Gas said in a statement. Peoples Gas has a subterranean network of some 4,600 miles of pipes under the city, including significant stretches of original cast and ductile iron — some dating back to the 1800s — which pose a risk of gas leaks that could lead to an explosion. Launched in 2011, the Safety (formerly System) Modernization Program to replace the aging iron pipes was projected at inception to cost $2.6 billion and take 20 years to finish. Plagued from the outset by delays and budget overruns, the program has already cost $3.3 billion and is just 38% complete, according to the utility. About 1,078 miles of the leak-prone cast and ductile iron pipes remain, Peoples Gas spokesperson David Schwartz said Thursday. Initially funded by a 10-year legislative rider enabling the utility to automatically pass the costs along to customers, the pipeline program was paused by the ICC last year for an investigation to determine the best path forward after the surcharge expired at the end of 2023. In November, two Illinois Commerce Commission administrative law judges issued a proposed order recommending Peoples Gas resume and finish the work — including the upgrade to medium pressure and meter relocation — by 2035, at a projected additional cost of $7.2 billion. The recommended plan, which was based on the preferred option suggested by Peoples Gas during the review process, would have put the total price tag of the program at $10.5 billion, with the utility's 891,000 Chicago customers bearing the cost through their monthly bills. Some consumer advocates believe the actual price would have been even higher. In October, the Citizens Utility Board released a Groundwork Data report it commissioned warning that completing the pipeline replacement program would actually cost another $12.8 billion, topping the utility's projections by more than $5 billion. The report concluded Peoples Gas would need to impose record-breaking 7% annual rate increases over the next 15 years to cover that cost, effectively doubling delivery charges for its customers. The long-running replacement program was driven by pressure from the administration of former President Barack Obama to hold utilities across the U.S. accountable for aging pipeline systems following a 2010 explosion in San Bruno, California, that killed eight people, injured 58 and destroyed 38 homes. But consumer advocates have argued for years that gas pipelines may be obsolete by the time Peoples completes the systemwide infrastructure upgrade, as the shift to electrification and renewable energy sources, such as wind and solar, gain traction. The new ICC order directs Peoples to retire all old cast iron and ductile pipe under 36 inches in diameter by 2035. During the review process, Peoples said that larger cast iron pipe in the system has a longer remaining life than smaller diameter pipe. While the order didn't preclude other system improvements, finding that 'moving from a low-pressure to a medium-pressure system can offer improvements in safety and operational efficiency,' it nonetheless directs Peoples to focus on getting the old iron pipes out, and also 'declined to prioritize' meter relocation work. After years of budget overruns, delays and expanding scope, Scarr is hopeful that the refocused pipeline program will finally get the job done for Peoples Gas customers and the city. 'It should be less expensive for customers and get better outcomes,' Scarr told the Tribune.
