Illinois Commerce Commission approves changes for Peoples Gas Pipe Replacement Program to proceed

CHICAGO (WLS) — A controversial pipeline replacement program was approved to move forward Thursday, but with reforms.

The Illinois Commerce Commission stopped the Peoples Gas Pipe Replacement Program two years back due to worries about high expenses and the possibility of passing on cost overages to customers.

ABC7 Chicago is now streaming 24/7. Click here to watch

A ruling Thursday determined the program will move forward with safety monitoring.

Peoples Gas says some pipes in Chicago date back to the 1800s, and need to be replaced. The company said safety experts support the plan.

However, opponents at the consumer advocacy group Citizens Utility Board claim that the budget has inflated significantly from roughly $1 billion to a potential excess of $12 billion in recent years. Some of these expenses are transferred to customers through increased rates.

Peoples Gas estimated the current cost of the project to be $10.5 billion.

Consumer watchdogs at Illinois PIRG say new reforms will drive costs of the project down, which can help lower bills.

“We’ve expressed long-standing concerns about this program’s escalating costs and how customers are not seeing sufficient benefits from these investments,” stated Abe Scarr from Illinois PIRG. “Whenever a utility company invests in its infrastructure and receives approval from regulators, it is entitled to recuperate those expenses with an added profit margin.”

Consumer groups also say safety concerns will be addressed by having Peoples Gas focus first on the pipes that are in the most need of being replaced, instead of a larger systemwide approach.

“Now, the utility has some specific direction to focus efforts and funds towards work that is necessary and targeting pipes most at risk,” said Sarah Moskowitz, with the Citizens Utility Board.

The ICC also set a new deadline for the project to be complete, moving it up from 2040 to 2035. The state said it aligns with multiple recommendations from engineering experts and ICC staff.

At one point there was a special fee on Peoples Gas bills, which went to pay for the program.

That fee is gone, but even with the new regulations, consumers may start to see higher bills in the future.

The ABC7 I-Team has been covering the story for over 10 years, including how it could affect consumers’ gas bills.

Peoples Gas said in a statement:

“For more than a decade we worked to replace old, leaky pipes in a systematic way that improves the safety and reliability of Chicago’s heating system. The Commission paused that work at the end of 2023, and has now lifted the pause. As we wait to receive the full Final Order and review it, the Commission made clear it wants us to focus on replacing more than 1,000 miles of pipes by 2035. This direction given by the Commission, compared to the prior approach, may necessitate additional cost and more construction sites disrupting streets across city neighborhoods.”