Some experts want Peoples Gas pipe replacement program scaled back after big rate hike
CHICAGO (CBS) -- Last year, a $303 million natural gas rate hike was approved for Peoples Gas—primarily as a result of an expensive gas pipe replacement program.
Some experts are now recommending that the program be scaled back so that it's more cost-effective.
Beneath Chicago's streets are nearly 2,000 miles of old, deteriorating natural gas pipes that can pose safety risks like gas leaks and explosions—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.
The gas hike approved in November was the largest gas utility rate hike in Illinois history, and rates had been going up before that.
"Over the last decade, gas bills in Chicago have gone up by hundreds of dollars per year," said Abe Scarr, director of the Illinois Public Interest Research Group, or Illinois PIRG.
Scarr said the Illinois Commerce Commission approved last year's rate hike largely due to the replacement program. Since then, the state paused spending on the program until an investigation could determine if it was worth it.
On Tuesday night, Illinois PIRG, the Illinois Attorney General's office, the City of Chicago, and other stakeholders filed expert witness testimony.
"They found that Peoples Gas had prioritized non-safety factors in the work it's doing, which it shouldn't be doing on a safety program," said Scarr. "Bottom line, they don't have an accurate way of knowing where the safety risks are, and correcting that in a cost-effective manner."
Illinois PIRG wants the expensive program reigned in.
But supporters of the current Safety Modernization Program, like the Gas Workers Union, worry that a permanent scaling back of the program will impact the reliability of the system.
"I think there's going to be a pretty big impact to the system because they paused it when they did, not knowing what this winter may bring us," said Sean Gaurige of Gas Workers Union Local 18007.
Gauridge also worries the scaling back will impact customers.
"There are a lot of things at risk here, and number one are the customers," he said. "You know, reliability of the gas system right now is tremendous."
The state investigation into the modernization program will continue until next January and could impact the future of the program going forward.
Peoples Gas released the following statement:
"We continue to review the hundreds of pages of filings. We appreciate the strong support from the ICC's safety staff and the Illinois Attorney General for continuing the critical work of removing rapidly corroding pipes that date as far back as the 1800's. These experts, along with others who filed testimony, have made very clear the work is needed for Chicagoans' safety, for reliability in the heating system, and for environmental sustainability."
