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Illinois Commerce Commission approves Nicor Gas rate increase with multiple disallowances and 9.60% ROE
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Summary
The commission approved Nicor Gas's proposed general rate increase in docket 25-0055 with substantive edits: several project disallowances (including $85.4M for vintage pipe work), transmission adjustments, direction to adopt affordability and no-regrets analyses, and a 9.60% return on equity.
The Illinois Commerce Commission on Nov. 19 approved a revised order in Nicor Gas's general rate case (docket 25-0055) that authorizes a rate increase while adopting multiple substantive edits to reduce the company’s revenue request and direct further study.
The commission’s edited order disallowed $85.4 million for vintage material pipe replacement work after finding Nicor failed to connect record information to management decisions on need, timing and pace. It also adopted transmission-related adjustments of $396,721 for station 152 and $163,041 for station 319, citing insufficient disaggregated costs and supporting evidence. The commission adopted the Attorney General’s proposed adjustments in part and encouraged Nicor to consider alternatives to replacement and affordability in capital planning.
The order disallowed $18.8 million of additional costs proposed for Nicor’s enterprise gas management system, concluding project management was imprudent and caused delays that led to cost overruns. The commission directed Nicor to hire an outside consultant to perform an accurate estimated-billing study and adopt staff-recommended adjustments for budget payment plan balances.
On capital structure and return, the commission adopted IIEC/CUB’s 50% common equity ratio recommendation and set a return on equity of 9.60% after applying three-fourths weight to DCF results and one-fourth to CAPM results. The edits also reduced rate case expense by $133,250 in part related to hourly billing rate increases for specific contractors.
The commission approved the order as edited after a brief considering period; there were no objections recorded on the administrative record.
What happens next: the order incorporates appendices and directions for follow-up work (including a line-extension policy report requested of staff) and will be reflected in subsequent filings and compliance filings tied to docket 25-0055.