Chicago Gas Bills Bite Harder as Advocates Flag Big Supply Cost Jumps

Households across northern Illinois are feeling a squeeze after a consumer-advocate analysis found that the cost utilities pay to buy natural gas has climbed sharply. The Citizens Utility Board (CUB) says supply costs rose by wide margins in recent months, and Nicor Gas has already passed a bill increase through to customers. Peoples Gas has warned it will seek higher rates in 2026, a prospect that has advocates and regulators bracing for tougher times for low-income families and seniors.

Supply costs climb and customers see the pain now

CUB’s review of utility filings and market data shows what the group calls a large increase in the price utilities pay for gas — far higher than what many households were paying last year. The group summarized those supply-price jumps as meaningful enough that bills will rise even where utilities are not changing core service charges. For many customers, the result is an immediate and visible jump in monthly bills.

The report singled out particularly vulnerable groups: low-income households, fixed-income seniors, and families already behind on utility payments. CUB framed the trend as an affordability crisis in the making, arguing that the combination of higher supply costs and looming company filings could force many customers to choose between heat and other essentials.

Consumer advocates’ analysis: how they reached their conclusions

CUB’s approach is straightforward. The group looked at the numbers utilities submitted to regulators about what they paid for gas supplies and how those costs were passed through to customers. Where utilities use a supply-cost tracker, CUB compared recent purchased-gas costs to prior periods and to typical market benchmarks. That is how the organization arrived at its headline range for price increases.

In its public statements, CUB emphasized the human effect behind the math. The group highlighted customers who are already enrolled in hardship programs and said recent trends mean those programs may be overwhelmed. While CUB didn’t advise specific policy fixes in the release, it urged regulators and lawmakers to act to protect vulnerable residents as bills rise.

How Illinois’ regulatory process will shape the 2026 fight

Utilities in Illinois do not set customer bills on their own. The Illinois Commerce Commission (ICC) reviews filings and decides what costs can be recovered from customers and how. There are two common pathways for bill changes: pass-through mechanisms that let utilities recover the commodity cost of gas with limited review, and base-rate cases that reset a utility’s allowed return and broader revenue requirements after a multi-month review.

Nicor Gas’s recent increase appears to have come through the supply-cost recovery mechanism — a relatively fast way to reflect market moves in customer bills. Those changes are often refunded or adjusted later if markets move the other way, but they hit customers immediately and can increase arrears if households can’t pay.

Peoples Gas’s plan for a 2026 increase is likely to take the form of a formal rate filing. That process will trigger written testimony, hearings and a public-comment period before the ICC issues an order. Lawmakers and city officials can intervene or push for settlements, and the commission can choose to phase in changes, reject specific costs, or require additional consumer protections as part of any approval.

Investor watchlist: what these developments mean for utility finances

For investors, rising supply costs do not automatically translate into higher profits for regulated utilities. Where costs are recovered through pass-through riders, utilities typically do not keep the margin on the commodity; they pass the cost to customers. But the practical effects matter for utility balance sheets and credit profiles.

First, sudden increases in customer bills can raise the risk of higher arrears and bad debt. If more customers fall behind, utilities may face timing mismatches between when they pay suppliers and when they collect from customers, creating working-capital pressure. That can raise short-term borrowing needs and squeeze cash flow metrics that creditors watch.

Second, a tougher public and political environment can influence longer-term ratemaking. If regulators respond to affordability concerns by limiting recovery of certain costs, lowering allowed returns, or imposing stronger consumer protections, that can reduce future revenue and make it harder for utilities to win rate relief. For shareholders, that means more regulatory risk in forecasts and valuations.

Investors should track a few concrete items: the size of deferred balances tied to commodity costs, the timing and outcome of any ICC orders, changes to allowed return on equity in rate cases, and trends in customer arrearages and disconnections. Those metrics show whether higher supply prices are a one-off cash flow headache or the start of a deeper profitability and credit story.

What to watch next — filings, hearings, gas prices and affordability programs

Key dates and data points will drive the next phase of this story. Expect Peoples Gas to signal more detailed timing in 2025 before a formal 2026 filing; that filing will set a regulatory calendar with public-comment windows and hearings. The ICC’s docket activity, including any interim orders or settlement talks, will be a central source of news.

On the market side, winter weather and wholesale natural-gas prices will remain a wildcard. If prices ease, supply-cost riders could fall and lower bills without regulatory action. If prices stay high, the pressure on households and utilities will persist.

Finally, watch changes in assistance programs: state and federal aid, utility-run hardship funds, and any new municipal relief measures. Those programs can blunt the immediate effect of higher bills and affect how regulators view the reasonableness of recovery plans.

For Chicago-area customers and investors alike, the next year will show whether this is a temporary spike or the start of a longer affordability and regulatory tug-of-war. Either way, the stakes are clear: higher supply costs affect both the monthly heat bill and the financial picture that regulators and markets must now weigh.

Sources

• prnewswire.com