ICC lifts pause on multibillion-dollar Peoples Gas pipeline project, orders utility to focus on high-risk pipes

CHICAGO — The Illinois Commerce Commission has lifted a pause against Peoples Gas that will allow the utility company to go forward with its multibillion-dollar plan to replace underground natural gas pipelines throughout Chicago.

Advocates are calling Thursday’s ruling by the Illinois Commerce Commission (ICC) a “win,” saying the order will help curb potential rate increases on heating bills, but Peoples Gas claims the new order is the costliest option to restart their work on the project.

“We do believe this will curb spending and it creates some more checks on utility spending,” Sarah Moskowitz, Executive Director at Citizens Utility Board, said.

The ICC is now ordering the utility company to prioritize replacing high-risk pipes in their pipeline program and the project will also be subject to yearly reviews.

“To be clear, the ICC’s decision is not a green light for Peoples’ Gas to return to business as usual. It is Peoples’ and any utility’s responsibility to safely maintain the infrastructure needed to run its system. However, these projects cannot come at unreasonable or unjustifiable costs to customers,” Acting ICC Chairman Doug Scott said Thursday. “Our investigation into Peoples’ SMP found that the utility’s proposed program options did not adequately prioritize the retirement of its most risk-prone pipes. To remedy this, today’s order refocuses Peoples’ proactive pipe replacement program on the retirement of cast and ductile iron pipes.”

Consumer advocates said they are pleased by Thursday’s ruling.

“Chicagoans deserve a safe reliable gas system, today’s decision focuses the companies’ efforts to ensure the system running safe and is now on People’s Gas to change its approach,” ICC Commissioner Stacey Paradis said.

Work has been paused for over a year to allow a state investigation into the project and consumer advocates feared that the rising costs of the project would have a devastating impact on future heating bills for Chicagoans.

“At its current rate, it would cost us $12.8 billion, they’ve already spent $3 billion, that would have raised people’s bills double in the next 15 years. So that wouldn’t have been good,” Moskowitz said.

According to Moskowitz, in some ZIP Codes, residents are falling behind on their utility bills.

“Consistently one in five customers have been behind on their bills. In some ZIP Codes it’s more like 40 to 50% are behind,” Moskowitz said.

But Peoples Gas said their new approach is the costliest approach to the work.

A company spokesperson told WGN-TV that the project could now cost just above $16 billion because of the complexities of construction in a city like Chicago.

“For more than a decade we worked to replace old, leaky pipes in a systematic way that improves the safety and reliability of Chicago’s heating system. The Commission paused that work at the end of 2023, and has now lifted the pause. As we wait to receive the full Final Order and review it, the Commission made clear it wants us to focus on replacing more than 1,000 miles of pipes by 2035. This direction given by the Commission, compared to the prior approach, may necessitate additional cost and more construction sites disrupting streets across city neighborhoods,” a spokesperson for Peoples Gas said in a statement.

The spokesperson added that delays and increasing project costs occurred under prior ownership. While the current ownership has set a realistic project budget and stuck to it.

“It costs money to replace these pipes but, in this case, there will be more oversight,” Moskowitz said.

In their decision, the ICC said any failure to comply with their directives could result in civil penalties.