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AARP, CUB oppose '$3 billion natural gas tax'

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Are home gas prices the next thing to go up?

AARP Illinois and the Citizens Utility Board Tuesday morning launched a statewide campaign to raise awareness of pending legislation the organizations say would hike natural gas prices. They called the legislative initiative by Peoples Gas, North Shore Gas and Ameren "the equivalent of a 10-year 'natural gas tax' of up to $3 billion."

The legislation backed by the utilities would reduce the Illinois Commerce Commission's oversight over rates. Peoples Gas says it needs the legislation to upgrade hazardous cast-iron pipes that are more than a century old. It also cites these benefits to the plan:

• Long-term cost savings, because it's less expensive to operate and maintain a modern system;

• A more modern and reliable distribution system;

• Added convenience, such as meter service without an appointment and an improved system that enables customers to choose from new or more efficient gas appliances;

• Environmental improvements, including a reduced release of carbon dioxide emissions, comparable to taking around 19,000 cars off the road.

Peoples also cites these economic benefits:

• An additional $413 million for the Illinois economy.

• The accelerated main replacement program has created more than 1,000 jobs and is supporting a union work force, veterans and minority-owned and female-owned businesses.

• A special program for veterans in which soldiers who have recently returned get training and become gas workers doing main replacement.

But CUB Executive Director David Kolata says, "The current regulatory system allows utilities to get the rate hikes they need--but first they have to prove they actually need them."

Currently, gas utilities have to prove they need a rate increase in 11-month cases before the ICC. AARP and CUB say the proposed legislation "would essentially leapfrog that process, opening the door for automatic rate hikes."

UPDATE: Here is the statement Peoples Gas issues Tuesday morning in response to the CUB-AARP Illinois press conference:

"Peoples Gas supports a bill that is currently working its way through the legislative process in Springfield. If passed by the Illinois General Assembly, this bill - the Natural Gas Modernization, Public Safety and Jobs Act - would bring Illinois' regulatory framework into the 21st century and allow for investments enhancing the safety and reliability of our state's natural gas infrastructure.

"Currently, instability and uncertainty characterize the state's regulatory framework.

"Chicago's gas pipelines are, in some cases, as much as 150 years old. Modernizing our natural gas infrastructure will provide customers with a safer, more reliable, and efficient system for generations while protecting more than 1,000 much-needed jobs."

Read a March 26 Sun-Times editorial here.

Read an AARP,CUB press release.doc press release here.

Read a Peoples Gas press release here.

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This page contains a single entry by Thomas Frisbie published on March 26, 2013 9:35 AM.

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