For years, we have called for reforms to the failing Peoples Gas pipe replacement program. The program has been mismanaged, is failing to adequately address the real risks in the Peoples Gas pipe system, is causing an affordability crisis in Chicago, and is absurd in the face of climate change.
Utility regulators at the Illinois Commerce Commission initiated a new investigation into the program on January 31st. During last year’s Peoples Gas rate case, the Commission concluded that the utility had failed to justify the cost of and plan for its pipe replacement program. As part of its rate decision, the Commission paused spending on the program until an investigation could determine the most effective and cost-effective way of replacing pipes at risk of failure.
For years, Peoples Gas has justified its program – which has a large scope including multiple different types of work beyond replacing high-risk pipes – as necessary for and effective at maintaining system safety. However, the Commission has expressed concern that these “system modernization” activities have delayed or been prioritized over the replacement of the highest risk pipes – an argument we have consistently made over time. Multiple outside reviews of leak rates show that the Peoples Gas system has either not improved or has worsened over the course of the replacement program, despite billions of dollars invested.
For the investigation, the Commission is requiring Peoples Gas to provide very specific information about the evolution of the program, a detailed description of the cost, time, and safety impacts of the program going forward, and provide a justification for the “neighborhood approach” of identifying and replacing high risk pipes. Peoples Gas has roughly two months to provide the information requested in the initiating order.
Illinois PIRG plans to actively participate in the investigation, which will be completed within 12 months.