Peoples Gas exec, consumer groups address rates, pipe replacement

Peoples Gas customers in Illinois could be in for higher bills as the utility moves to replace aging pipes and the city of Chicago moves toward electricity.

The Chicago City Council Committee on Environmental Protection and Energy met Monday to discuss the Illinois Commerce Commission’s move to allow Peoples to restart its pipe replacement program. The ICC ordered a pause of the program in 2023 when cost estimates ballooned from $1 billion to $11 billion.

In February, the ICC ruled that Peoples could continue pipe replacement with a limited scope. Instead of replacing the entire system, the ICC said the utility could retire at-risk gas pipes with an acute safety risk by 2035.

Peoples Gas President Maria Bocanegra said Chicago’s natural gas system is one of the oldest in the country and more than 1,100 miles of pipe would need to be replaced. Bocanegra did not rule out a potential rate hike to deal with the costs.

“Are we receiving enough revenue to be able to execute at whatever level and those amount of miles that might be necessary? I don’t want to discount the possibility of us having to go in to the ICC for their review and their opinion on what exactly a rate increase might look like,” Bocanegra said.

Chicago Alderman David Moore asked Bocanegra if the city’s move away from gas to electricity would cause gas customers to pay more. Both city and state politicians have made various proposals aimed at banning natural gas.

“The answer is yes. We believe that there is a financial impact to those ratepayers, to their detriment,” Bocanegra answered.

Citizens Utility Board Executive Director Sarah Moskowitz said Peoples earned $224 million in profits last year after ushering in a record rate hike in January 2024.

Moskowitz said Peoples guessed wrong about gas commodities prices and expressed CUB’s concern about a 116% increase in Peoples’ supply price this month.

“Gas prices are rising again, which means Peoples Gas customers are getting squeezed now on both ends of their heating bills, paying more for Peoples to both acquire and deliver fuel to their homes,” Moskowitz said.

Moskowitz told the committee that customers owed a collective $94 million in debt to the utility, including unpaid bills and late fees.

Illinois Public Interest Research Group Director Abe Scarr said Peoples could more cost-effectively mitigate safety risks by lining pipes or using advanced repair methods instead of replacing pipes.

“These strategies have many potential benefits, including the potential to be much less expensive,” Scarr said.

Alderman Raymond Lopez noted that the state’s ICC paused the pipe replacement program.

“Two years worth of bickering, posturing and politicizing and we came back to the same conclusion: Get back to work. But now we have to do it 10 times faster, excuse me, a hundred times faster,” Lopez said.

Lopez also took aim at the ICC over rate hikes.

“As they are talking about rate increases and they are talking about the impact on consumers, they didn’t bat an eye in 2024, adding a $624 increase on businesses without any kind of impact study or to see what that’s going to do to the mom-and-pop businesses throughout the entire city of Chicago,” Lopez said.

Greg Bishop and Kevin Bessler contributed to this story.