Peoples Gas is not on track to fulfill its pipe retirement mandate

Last February, utility regulators at the Illinois Commerce Commission (ICC) ordered Peoples Gas to retire more than 1,000 miles of iron pipes by January 1, 2035. To succeed, Peoples Gas will need to more than double its recent pace of retiring 58 miles per year.

Peoples Gas is making the task much more challenging by almost exclusively selecting the slowest and most expensive (and therefore, the most profitable) approach to pipe retirement: replacement, i.e. installing new pipes. Unless Peoples Gas begins actively pursuing alternatives to replacement, I am highly skeptical it will meet the 2035 retirement deadline. 

Recent actions by the utility make me more skeptical.

Peoples Gas is showing little urgency to meet the retirement deadline

First, in 2025, Peoples Gas retired a miniscule 4.1 miles of iron pipes. 

To be fair, the ICC ordered Peoples Gas pause its pipe retirement program for over a year. It’s reasonable to not go from zero to sixty after the pause was lifted in February 2025. It takes time to implement reforms ordered by the ICC, design projects, acquire permits, and secure the needed workforce and materials. 

That said, with less than a decade to retire more than 1,000 miles of pipe, 4 miles in the first year is an exceedingly slow start. For reference, Peoples Gas retired 33.5 miles of iron pipe in 2024, while the program was paused. (The company was required to finish projects that were in-progress when the pause was initiated.)

Second, last week the company disclosed that it has lowered its expected 2026 retirement to approximately 21 miles. In its rate filing three months earlier, Peoples Gas said it would retire 35 miles.

Shockingly, despite reducing its 2026 retirement goal by 40%, Peoples Gas reduced its retirement budget by less than 2%, from $214 to $210 million. To look at it another way, the budgeted cost-per-mile jumped from $6.1 to $10 million. At that cost, Peoples Gas would spend more than $10 billion to retire its remaining pipes, leading to severe rate hikes.

The retirement challenge ahead

In its rate filing, Peoples Gas stated it will retire 53 miles in 2027. If the company hits its 2026 and 2027 retirement goals (something it has consistently failed to do), it will have 946 miles remaining to retire from 2028 through 2034. That will require retiring more than 135 miles per year over seven consecutive years. Peoples Gas retired more than 60 miles in a single year only once since 2018.

If Peoples Gas it sticks to its slow, expensive, replace-everything approach, it’s hard to believe it will achieve that pace of pipe retirement. On multiple occasions, I’ve posed the question to company executives: ‘do you think, taking your proposed approach, that you can meet the 2035 deadline?’

They’ve said plenty in response, but one thing they have not said is “yes.”

A better approach: safety first.

Rather than placing profit first by over-relying on replacement, the most expensive approach to pipe retirement, Peoples Gas should put safety first. 

A safety first approach boils down to an accurate, transparent assessment of safety risk combined with a fair consideration of all retirement strategies, including advanced repair and rehabilitation. 

For example relining pipes with cured in place liners can eliminate leaks and extend the life of pipes for over 100 years – longer than the expected life of newly installed plastic pipes. 

A safety first approach should cost less while improving safety more. It should also facilitate a faster pace of retirement because it takes less time to repair or rehabilitate pipes than it does to replace them. Finally, with an accurate, transparent assessment of risk, the ICC may determine some pipes could be retired on a longer timeline, lessening customer bill impacts and unlocking more options for pipe retirement, such as neighborhood electrification. 

This is the approach Illinois PIRG has advocated for for years. We’ll be introducing significant expert witness testimony supporting it in the rate case on May 5th.