Illinois state regulators rein in Peoples Gas pipeline replacement program
The Illinois Commerce Commission voted on Thursday to allow Peoples Gas to resume a controversial pipeline replacement program, but with some big changes aimed at streamlining the project and saving customers money.
The ICC said the expansive project can't come at an unreasonable cost to customers, who have been upset about rising gas bills in recent years.
Consumer advocates had said the nearly $13 billion proposal project – which was billions over budget and years behind schedule could have led to record-breaking rate hikes over the next 15 years if the ICC hadn't stepped in to force Peoples Gas to scale it back.
Utility watchdogs said customers shouldn't expect a big change in their bills right away, but the ICC's decision should rein in future rate hikes at Peoples Gas.
"Essentially, what we saw today is the regulators deciding to regulate, and that's what we wanted," said Sarah Moskowitz, executive director of the Citizens Utility Board, a non-profit utility watchdog that fights rate hikes.
Last year, CUB released a report showing that if Peoples Gas was allowed to continue spending at its current rate, the pipe replacement program would cost an additional $12.8 billion to finish, doubling the amount customers pay for gas by the year 2040.
Peoples Gas has said the pipeline replacement program is necessary because so many of their pipes are past their useful service life.
There are currently more than 1,100 miles of dangerous, old, deteriorating natural gas pipes in Chicago that need to be replaced — some dating back as far as the 1800s — prompting Peoples Gas to spend billions of dollars on what is known as the "Safety Modernization Program" to replace them, and in return sending gas bills climbing.
But in November 2023, due to delays, the project going way over budget, and concerns that the program was not properly prioritizing addressing safety risks, the ICC paused the program and ordered an investigation.
On Thursday, the ICC ruled that the program can finally resume, but must refocus to specifically address the retirement of these aging pipes by the year 2035.
"On the whole, I think it's pointed the program in a better direction, refocusing on the core safety risks that the program always should have been about, and should be about going forward," said Abe Scarr, director of the Illinois Public Interest Research Group, a nonprofit consumer advocacy group.
In a statement, Peoples Gas said this new focus ordered by the ICC might actually increase costs for them, and result in "more construction sites disrupting streets across city neighborhoods."
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