Peoples Gas Begs for $134M Amid Safety Fears & Job Cuts in Chicago

Peoples Gas Begs for $134M Amid Safety Fears & Job Cuts in ChicagoSource: Citizens Utility Board
Damon R. Sheffield
Published on December 02, 2023

In a dramatic plea to state regulators, Peoples Gas has filed an emergency motion to secure $134 million in previously disallowed pipeline infrastructure funding, warning of potential safety hazards and looming job losses. Peoples Gas emphatically expressed fear of detrimental consequences, including "safety risks from leaking pipes, gaping holes in streets and sidewalks, replacement meters left 'dangling' on customer residences" to the Chicago Tribune, stressing that hundreds of workers could be sent to the unemployment line come the new year.

This urgent call for the restoration of funds comes on the heels of the Illinois Commerce Commission's (ICC) pause of Peoples Gas' long-standing System Modernization Program—a sweeping initiative to replace 2,000 miles of aging iron pipes beneath Chicago. "The company understands the Commission’s directive to pause work on SMP, however, the $265 million in work that was paused includes more than $134 million in other critical safety and reliability work outside of SMP," Peoples Gas spokesperson David Schwartz revealed in a statement. The freeze ordered by the ICC last month has put numerous projects in a state of uncertainty, with Peoples Gas scrambling to safeguard over half of the slashed $265 million budget for 2024.

But this plea for funding restoration is shrouded by troubling findings of alleged mismanagement and resistance to transparency. In recent findings by the Citizens Utility Board, Peoples Gas has come under fire for failing to provide a comprehensive cost analysis of the pipeline program since 2015, amidst ongoing schedule delays and budget overruns. "Peoples Gas’ response to the Commissioners’ questions once again makes clear that the utility’s management does not understand and cannot manage the multibillion-dollar, decades-long overhaul of its fossil gas infrastructure," stated Abe Scarr, Illinois PIRG Education Fund Director.

The debacle has consumer advocates pushing back. Arguing that the pipeline program's shortcomings are hammering Chicago customers with excessively high bills, groups like Illinois PIRG and the Citizens Utility Board are challenging Peoples Gas' request for a historic $402 million rate hike. Caught in this tumultuous back-and-forth, Peoples Gas customers currently facing around $50 per month in fixed charges could see their bills climb by an average of $11.83 monthly should the rate increase move forward, spelling a burdensome $140 additional cost annually, according to the ICC filings.

In the face of an investigation slated to begin by February to diagnose the best methods and resolve how to invest in replacing high-risk pipes, the urgency of Peoples Gas' emergency motion is palpable. "We are working to minimize job losses as part of the ICC’s order to pause the work, but we know that several hundred jobs will likely be lost—mostly union construction jobs," Schwartz added, bearing the gravity of the implications for workers in the city. Employees and contractors affiliated with the International Union of Operating Engineers Local 150, with Ed Maher pointing out, "This is going to put a thousand people out of work right around the holidays," are especially concerned, bracing for the possible fallout. The ICC is expected to discuss the matter during its regular Dec. 14 open meeting.