In a move that may significantly impact the wallets of Chicago's natural gas customers, two administrative law judges with the Illinois Commerce Commission have proposed that Peoples Gas should continue its pipeline replacement program, which had been previously halted amid concerns over its ballooning costs and completion timeline. According to a report by the Chicago Sun-Times, the judges have suggested pumping another $7.2 billion to finish the project by 2035, ahead of the utility’s initial 2040 target.
The recommendation comes after an extensive investigation into why the upgrade, initially budgeted at $2 billion in 2007, has swelled to $3.3 billion in costs with only 38% of work completed. The Chicago Sun-Times further reports that the judges have called for Peoples Gas to develop an updated replacement plan within two years, in hopes of overhauling the program dramatically affecting more than 800,000 households. However, consumer advocates swiftly condemned the plan, insisting it could lead to unprecedented rate hikes.
Meanwhile, the Chicago Tribune provides insights into the refinement of the plan which removes the replacement of 49 miles of larger cast-iron pipe, considered to have a longer shelf-life, thus saving about $330 million. The judges have also apparently recommended Peoples Gas to swiftly carry out the work and to conduct workshops to integrate stakeholder input regarding the new risk assessment plan.
However, there's more to the story than just the decisions of administrative law judges. The five-member Commerce Commission, which will make the final decision in January, has previously shown a readiness to go tougher on utilities than agency staff might suggest. Peoples Gas President Bill Mastoris told the Chicago Sun-Times that the recommendations are "consistent with what the ICC’s own expert staff, a world-renowned engineering firm, and our own construction crews have been seeing for years." Yet, Sarah Moskowitz, executive director of the Citizens Utility Board, warned that the proposed order "would give Peoples Gas a license to inflict staggering rate hikes on more than 800,000 Chicago households," as quoted by the Chicago Sun-Times.
With this complex situation unfolding, Chicago residents wait to see how the Illinois Commerce Commission will balance the spectrum of considerations come January; from safety and infrastructure updates to the financial implications on consumers and the shifting landscape of energy sustainability in the state.
