Flannery Fired Up: Gas Tax, Illinois Credit Rating

Critics of the Peoples Gas utility warn that Chicago consumers could soon be socked with natural gas bills that are double what suburban consumers pay. And they predict that the company’s multi-billion dollar capital spending plan could eventually cost consumers an extra $750 a year.

Joining us on this edition of Flannery Fired Up: Abe Scarr of Illinois PIRG and Steve Daniels, a senior reporter for Crain’s Chicago Business whose beat includes the natural gas utility owned by Milwaukee-based WEC Energy. Daniels has reported on WEC’s astounding spending spree in Chicago, expected to exceed $3 billion in just the next five years. Illinois utility regulations provide perverse incentives for such spending, by virtually guaranteeing it will lead to higher earnings.

A spokeswoman for WEC called the numbers in an Illinois PIRG report inaccurate and “old news.” We hope to book a company spokesman to answer questions about all this in coming weeks.

Also on this show, three supporters of Illinois’s 19-cents a gallon gasoline tax increase. They include RTA Chairman Kirk Dillard, Deputy Gov. Christian Mitchell and Todd Maisch, president and chief executive of the Illinois Chamber of Commerce. They all argue the higher tax and vehicle registration fees are worth it, since it will support $24 billion worth of roads and transit improvements. Gov. Pritzker’s capital plan calls for total new spending of $45 billion, with the balance paid for by a big expansion of legalized gambling across Illinois.

Rounding out this program: Brian Battle, director at the Performance Trust Companies. Battle is a highly-respected expert in state and local government bonds. He’s highly skeptical of a lawsuit seeking to invalidate billions of dollars in bonds issued by the State of Illinois.

The court action was filed by conservative political activist John Tillman and a group that holds Illinois bonds other than those that are the subject of the suit. Some have speculated that the pending lawsuit will force Illinois to pay even more for future borrowing. The state’s credit rating is currently one notch above junk status. Battle, though, said the lawsuit is likely to fail and would ultimately have little impact on the market.