Environmental and Consumer Advocates Call for Reform of Peoples Gas Pipe Replacement Program
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, renewing their calls for reform of the Peoples Gas pipe replacement program.
Program Aims to Replace Aging Pipes
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.
Critics Question the Program’s True Intentions
However, critics argue that the program is not just about replacing aging pipes, but is actually a way for Peoples Gas to increase its revenue. "They’ve taken the fact there is a safety risk as an excuse to do a whole lot more work," said Abe Scarr, the director of Illinois PIRG. "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."
Cost Overruns and Rate Hikes
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 that 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.
Chronic Debt and the Impact on Low-Income Households
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%. "It’s a significant concern, especially for low-income households who may already be struggling to make ends meet," said Ivonne Rychwa, the outreach director for CUB.
Rebuttal from Peoples Gas
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."
Next Steps
Oral arguments are scheduled for January 29, with the final results of the ICC’s review expected to be released in February.
Conclusion
Environmental and consumer advocates are calling for reform of the Peoples Gas pipe replacement program, citing concerns over cost overruns, rate hikes, and the potential impact on low-income households. As the ICC continues its investigation, it remains to be seen what changes will be made to the program.
Frequently Asked Questions
- What is the Peoples Gas pipe replacement program?
The program aims to replace Peoples Gas’ aging cast-iron pipes with durable plastic pipe. - Why are critics concerned about the program?
Critics argue that the program is not just about replacing aging pipes, but is actually a way for Peoples Gas to increase its revenue. - What are the potential rate hikes?
The CUB report estimates 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.
