Chicago

Environmental, consumer advocates call for reform of Peoples Gas pipe replacement program

Since the pipe replacement program began, the price tag has continued to increase, with Peoples Gas being accused of reckless spending that could leave customers on the hook in the long run.

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Environmental and consumer advocates marched from the Citizens Utility Board offices to the Illinois Commerce Commission in the Loop on Monday to hand-deliver 5,000 public comments.

The groups are renewing their calls for reform of the Peoples Gas pipe replacement program, ahead of the release of results from a nearly year-long ICC investigation.

"We want to make sure the decision-makers at the ICC know the public is paying attention and wants to see reform," said Abe Scarr, the director of Illinois PIRG.

The program aims to replace Peoples Gas' aging cast-iron pipes with durable plastic pipe.

"Crews will replace more than 2,000 miles of natural gas pipes. Plastic pipes are more flexible and better at withstanding the freezing and thawing cycles of Chicago's weather," according to the company's website.

Some of the current pipes are more than 100 years old.

"They’ve taken the fact there is a safety risk as an excuse to do a whole lot more work," said Scarr.

"The end goal they are working towards is overhauling the system to be able to deliver more gas rather than running a program specific to addressing the risk," he said.

Since the project began, the price tag has continued to increase, with Peoples Gas being accused of reckless spending that could leave customers on the hook in the long run.

A report from consumer advocacy group Citizens Utility Board, which was released in the fall, claims finishing the project will now cost another $12.8 billion, far more than the company's initial projections.

The CUB report found that completion of the pipe replacement project would cause rate hikes of about 7% annually for 15 years, impacting the utilities of more than 800,000 customers in Chicago.

According to CUB, those increases would show up on customer bills in the form of delivery charges, which could double from the current annual average of $1,206 to $2,424 by 2040.

"Roughly 20% or one in five Peoples Gas customers are more than 30 days behind on their gas bills, and in some neighborhoods, the number of customers in chronic debt exceeds 30-40%," said Ivonne Rychwa, the outreach director for CUB.

In a statement to NBC 5, a spokesperson for Peoples Gas said:

"Chicagoans need a safe and reliable heating system, especially on frigid days like today. The current system beneath Chicago dates back to the 1800's. Independent experts agree it needs updating. Safety engineers and two judges are urging state regulators to let this critical work continue. Political activists with extreme agendas are out of touch with reality and telling people to ignore the facts. Their approach would add $5.5 billion in costs, and ignores crucial safety needs."

Last May, the ICC denied a request from Peoples Gas for a rate hike of nearly $8 million.

That proposed rate increase was in addition to a $303 million rate increase that went into effect in December 2023.

As part of the 2023 decision, the ICC paused the pipeline program to launch an investigation, citing concern over increasing costs.

Oral arguments are scheduled for Jan. 29, with the final results of that review expected to be released in February.

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