Editorial: Peoples Gas gets the right marching orders at long last

Chicago Tribune

24-02-2025

The Illinois Commerce Commission last week finally did what the state should have done years ago: kill Peoples Gas' unaffordable, ill-conceived program to rebuild the natural gas pipe system below Chicago's streets.
For well over a decade, the utility delivering the fuel heating most Chicago homes and businesses has spent billions and made relatively little headway on what it (and the federal government) said was an urgent task — replacing extremely old, leak-prone gas pipes identified as a safety hazard. Peoples' program began in 2011 as the Accelerated Main Replacement Program and changed names a few times in the intervening years as the company's plans mushroomed in ambition and scope. Its latest moniker is the Safety Modernization Program.
Ordinarily, it wouldn't be necessary to repeatedly rebrand an expansive infrastructure upgrade, but opposition to the effort grew over the years as Peoples turned a program designed to replace corroding old pipes into a plan to transform its entire system from low pressure into medium pressure, doing so neighborhood by neighborhood, at massive expense to ratepayers and extraordinary disruption to affected homes and businesses.
With a 10-year mechanism in a 2013 state law allowing Peoples to slap a surcharge on customer bills with no regulatory oversight to speak of, the utility for years ignored the critics and budgeted hundreds of millions in capital spending annually, which was reimbursed along with a substantial return through customer bills. As those bills predictably soared, households all over the city — but concentrated in lower-income South and West side neighborhoods — couldn't afford to heat their homes and fell behind to the tune of hundreds of dollars each on average. Those who could afford their bills made up the difference in higher rates, which under state law Peoples could boost to cover the delinquent accounts.
What a racket. What a boondoggle.
And Springfield did nothing, with Democrats in the capital captive to the politically potent trade unions that benefited from the work and opposed any changes. Finally, that 10-year mechanism expired two years ago, and Gov. JB Pritzker dispatched a trusted aide, Doug Scott, to lead the ICC as chairman. In late 2023, the Scott-led commission put Peoples' Safety Modernization Program on pause and instructed the utility to return with cheaper, less disruptive ideas on getting the needed work done — that is, retiring the old pipes.
Peoples responded last year with a plan that looked an awful lot like the old one. Last week, Scott and all four other commissioners without debate criticized Peoples for being unresponsive to the regulators' requests and mandated the utility do what it promised in the first place.
That's more like it.
In late 2023 we called on the ICC to halt the program, and we said late last year that it should stick to its guns. To their credit, and to the relief of ordinary Chicagoans just wanting to afford being able to stay warm in Chicago winters, the regulators did just that.
Now Peoples, whose Wisconsin-based corporate parent has pulled out every political stop to keep the lucrative capital spending spree going, must at long last honestly respond to the demands of the state regulators and our city.
With an eye to cost-effectiveness, replace the leak-prone old pipes without rebuilding the entire system. Be watched by an outside consultant. Compensate Chicagoans when and where damage happens to their property. And finish the work in the next decade under peril of penalties if adequate progress is not made.