Peoples Gas upgrade behind schedule, say consumer advocates

As Peoples Gas has asked regulators to approve a $400 million rate increase for Chicago utility users, the company is struggling to meet targets and control costs of an upgrade that began more than a decade ago, consumer advocates said Thursday.

Reports submitted this week to the Illinois Commerce Commission, which is reviewing a rate increase proposal from Peoples, showed the utility was behind on spending on replacing gas lines, delays the company blamed on labor shortages.

A separate, monthly report to the ICC showed that roughly 1 in 5 Peoples customers are more than a month behind on their bills, with a combined $100 million overdue, said Abe Scarr, director of the Illinois Public Interest Research Group, a consumer advocacy organization.

The initial estimate for the program was pegged at $1 billion. Scarr said Peoples managed to retire just 51 miles of aging pipe in the last quarter, 25% less than the target.

Rather than focusing on the most dangerous lines, Peoples is using consumer fees to upgrade the entire system, Scarr said. Costs for the work, could run to $11 billion, Scarr said.

A Peoples spokesman called Scarr’s critique “false and misleading antics.”

“Our work to replace Chicago’s rapidly corroding iron pipes is on budget and on schedule. The data we reported this week to regulators confirms the program’s success and importance,” Peoples spokesman David Schwartz said in an email.

“The rate filing we submitted last month is the first time in nine years we have asked to raise base rates. After nearly a decade of cutting costs and finding efficiencies, a rate filing became necessary to ensure the ongoing safety, reliability and environmental sustainability in Chicago’s system,” he said.