Regulators reject Peoples Gas effort to keep funding controversial pipeline replacement program
The Illinois Commerce Commission cut off spending for the pipe program last month pending an investigation into the project, which is years behind schedule and billions of dollars beyond initial budget estimates.
Regulators on Thursday brushed aside dire warnings from Peoples Gas about dangling meters, gashed sidewalks and other safety issues that the utility claims will be left hanging unless the state allows it to keep funding a long-maligned pipeline replacement program.
The Illinois Commerce Commission unanimously rejected Peoples Gas’ request for “clarification” on its order last month that cut off spending for the pipe program pending an investigation into the project, which is years behind schedule and billions of dollars beyond initial budget estimates.
That edict was issued last month by the commission as it slashed a request from the utility to raise rates on its 884,000 Chicago customers by a collective $402 million, down to $301 million.
Peoples Gas filed an emergency motion Dec. 1 arguing it needed the commission to allow it to spend $134 million to wrap up “critical safety and reliability work” on the pipe program that’s already underway before they can safely comply with the commission’s ruling.
Commission chairman Doug Scott said Thursday Peoples Gas “has an enduring responsibility” under state law to maintain “an adequate, safe and reliable system.”
The panel previously noted its order “will not remove any funding related to emergency response to leaks, pipe breaks, or other critical safety measures.”
Scott also criticized Peoples Gas for introducing new evidence in the rate case — a quasi-judicial process — and suggested they request a new hearing, which the utility indicated it would.
“While we wish the Commission would have granted our emergency request, this decision opens the door for us to request a rehearing — something we are likely to do in the coming days,” a Peoples Gas spokesman said in an email.
The gas company has also warned that shutting down the pipe program will result in “hundreds” of jobs being cut in the new year.
Ahead of the commission’s decision, numerous labor unions filed letters urging the state to reconsider its funding. An attorney for Gas Workers Union Local 18007 wrote that funding was needed “to finish in-progress construction that would otherwise leave neighborhoods all across the city partially torn up, dangerous and in disarray.”
Sarah Moskowitz, executive director of the Citizens Utility Board, called the utility’s effort “a media play that used their workers kind of as hostages.”
“It was, in our view, completely inappropriate and disingenuous, and the ICC saw it that way too,” she said.
In 2007, Peoples Gas put a price tag of $1.7 billion on the massive plan to replace about 2,000 miles of old pipes that deliver natural gas to Chicago homes, but — before the ICC stepped in last month — costs were expected to land well over $8 billion by its completion in 2040.
Under the approved rate hike, most Chicagoans will see their monthly gas bills increase by about $6 starting in January.