Chicago heating bills could double under troubled Peoples Gas pipeline replacement program, report finds
Chicago heating bills could double over the next 15 years if state regulators allow Peoples Gas to move forward with its long-maligned pipeline replacement program, according to a report commissioned by consumer advocates.Customers would face a series of record-setting annual rate hikes every year through 2040 — and keep paying for the long-delayed project for an additional six decades, under projections released Tuesday by the Citizens Utility Board.“This report is a warning that the Peoples Gas pipeline replacement boondoggle will become an even bigger disaster if they don’t rein in reckless spending,” CUB communications director Jim Chilsen said of the analysis by Groundwork Data, a clean-energy consulting firm.A Peoples Gas spokesman dismissed the report as “claims from an out of state, anti-natural gas group,” and maintained that “natural gas heating remains the most affordable way to stay safe and warm, by far.” Related Peoples Gas pipe replacement is costing Chicagoans more Last year, regulators at the Illinois Commerce Commission paused most spending on the pipeline program pending a state investigation of the plan to replace thousands of miles of the aging pipes that deliver natural gas to Chicago homes.Initially estimated at $2 billion when the program launched in 2007, costs have soared to almost $11 billion with only about 38% of the work done.It would take another $12.8 billion to finish the job by 2040 as planned by Peoples Gas, according to the Groundwork Data report, which analyzed the utility’s quarterly commerce commission reports over the past five years. At its current pace, the 1,500-plus remaining miles of pipe won’t be completely replaced until 2051.The commission, which has the final say on how much utilities can charge customers, granted Peoples Gas a record-breaking rate hike last fall, but cut off company spending on the replacement program that commission Chairman Doug Scott said “is not justified.”With dire warnings from Peoples Gas that halting the program risks “the continued safety and reliability of Chicago’s energy system,” the commission allowed the utility to spend another $1.6 million on the project — but only “out of an abundance of caution.” Crews work on installing a new 12-inch main on the 3200 block of West Eastwood in Albany Park in 2019. Victor Hilitski/For the Sun-Times The commission’s investigation of the replacement program is ongoing. Staffers for the agency are expected to issue a recommendation next month to the five-person panel, which is expected to issue a final ruling in January on the future of the pipeline program.The Groundwork Data report wasn’t filed as a docket entry to the commission’s investigation, which is handled as a quasi-judicial case.Peoples Gas spokesman David Schwartz slammed CUB for publicizing it outside the docket, arguing that “instead of submitting this ‘report’ to state regulators for objective examination, they’re trying to avoid fact-checking.”Chilsen said the report will be presented next month to the commission at one of its “Future of Gas” hearings. The agency is trying to map a path toward phasing out fossil-fuel energy sources by 2050, as outlined in the Climate and Equitable Jobs Act that was signed by Gov. JB Pritzker in 2021.Allowing Peoples Gas to restart the pipeline program without major changes “would necessitate historically unprecedented rate hikes, even assuming a stable gas customer base,” author Dorie Seavey wrote in the report, with annual average household bills totaling $1,206 forecast to jump to $2,424 by 2040.But costs could balloon further as customers opt for electric options like heat pumps and leave the utility altogether, spreading rising expenses “over a shrinking pool of ratepayers,” Seavey wrote. A 2% decline in customers could raise average annual bills to $3,437, researchers concluded.Either way, residual financing costs for the project could be stuck on residential bills until the year 2100, they found. Related Illinois utility spending will greatly increase consumer bills, a new report warns Peoples Gas insists its proposal to get back to work costs $5.5 billion less than proposals from CUB and its allies, while supporting “measures that would force Chicagoans to go ‘all electric’ — a move that would double or triple heating bills.“This s
Chicago heating bills could double over the next 15 years if state regulators allow Peoples Gas to move forward with its long-maligned pipeline replacement program, according to a report commissioned by consumer advocates.
Customers would face a series of record-setting annual rate hikes every year through 2040 — and keep paying for the long-delayed project for an additional six decades, under projections released Tuesday by the Citizens Utility Board.
“This report is a warning that the Peoples Gas pipeline replacement boondoggle will become an even bigger disaster if they don’t rein in reckless spending,” CUB communications director Jim Chilsen said of the analysis by Groundwork Data, a clean-energy consulting firm.
A Peoples Gas spokesman dismissed the report as “claims from an out of state, anti-natural gas group,” and maintained that “natural gas heating remains the most affordable way to stay safe and warm, by far.”
Last year, regulators at the Illinois Commerce Commission paused most spending on the pipeline program pending a state investigation of the plan to replace thousands of miles of the aging pipes that deliver natural gas to Chicago homes.
Initially estimated at $2 billion when the program launched in 2007, costs have soared to almost $11 billion with only about 38% of the work done.
It would take another $12.8 billion to finish the job by 2040 as planned by Peoples Gas, according to the Groundwork Data report, which analyzed the utility’s quarterly commerce commission reports over the past five years. At its current pace, the 1,500-plus remaining miles of pipe won’t be completely replaced until 2051.
The commission, which has the final say on how much utilities can charge customers, granted Peoples Gas a record-breaking rate hike last fall, but cut off company spending on the replacement program that commission Chairman Doug Scott said “is not justified.”
With dire warnings from Peoples Gas that halting the program risks “the continued safety and reliability of Chicago’s energy system,” the commission allowed the utility to spend another $1.6 million on the project — but only “out of an abundance of caution.”
The commission’s investigation of the replacement program is ongoing. Staffers for the agency are expected to issue a recommendation next month to the five-person panel, which is expected to issue a final ruling in January on the future of the pipeline program.
The Groundwork Data report wasn’t filed as a docket entry to the commission’s investigation, which is handled as a quasi-judicial case.
Peoples Gas spokesman David Schwartz slammed CUB for publicizing it outside the docket, arguing that “instead of submitting this ‘report’ to state regulators for objective examination, they’re trying to avoid fact-checking.”
Chilsen said the report will be presented next month to the commission at one of its “Future of Gas” hearings. The agency is trying to map a path toward phasing out fossil-fuel energy sources by 2050, as outlined in the Climate and Equitable Jobs Act that was signed by Gov. JB Pritzker in 2021.
Allowing Peoples Gas to restart the pipeline program without major changes “would necessitate historically unprecedented rate hikes, even assuming a stable gas customer base,” author Dorie Seavey wrote in the report, with annual average household bills totaling $1,206 forecast to jump to $2,424 by 2040.
But costs could balloon further as customers opt for electric options like heat pumps and leave the utility altogether, spreading rising expenses “over a shrinking pool of ratepayers,” Seavey wrote. A 2% decline in customers could raise average annual bills to $3,437, researchers concluded.
Either way, residual financing costs for the project could be stuck on residential bills until the year 2100, they found.
Peoples Gas insists its proposal to get back to work costs $5.5 billion less than proposals from CUB and its allies, while supporting “measures that would force Chicagoans to go ‘all electric’ — a move that would double or triple heating bills.
“This so-called ‘study’ completely ignores testimony that independent engineers and safety experts gave in front of state regulators — that there is an ‘urgent need’ to continue replacing corroding pipes across Chicago that date back as far as the 1800s. CUB and their activist allies ignore the risks to people who live and work in Chicago,” Schwartz said.
CUB executive director Sarah Moskowitz urged regulators “to review these findings and take steps to hold Peoples Gas accountable and put wise safeguards on their spending.
“The state of Illinois must begin to plan for a thoughtful, managed transition to cleaner, more affordable heat, instead of pouring billions more dollars into a methane gas system that is dirty, expensive and hazardous to the climate,” she said in a statement.
The commission’s decision last year also created a new tiered system of discounted natural gas rates for lower-income households.
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