Blog

Protecting Consumers from Runaway Gas Bills

By Abe Scarr
Director

The Illinois Commerce Commission is considering action that could hike Chicago gas bills for decades to come.

 

Over the past few years, there have been numerous problems with the Peoples Gas "System Modernization Program," which is replacing natural gas mains throughout Chicago. Everyone agrees the project itself is critical, but so far implemenation has been terrible, with costs estimates ballooning to over $8 billion. This lead the Illinois Commerce Commission, which regulates utilities, to order an investigation last year. Unfortunately, the action they may take after this investigation is to allow the status quo to continue. Here is a good run down from Crains Chicago.

 

Today,  I am going before the ICC to urge them to reconsider this action. Below are my comments. You can also make a public comment by going to their website and searching for docket number 16-376.  

 

I urge the Commission to not approve the Proposed Order on the Peoples Gas System Modernization Program. The Proposed Order would allow Peoples Gas to continue its program without appropriate prioritization of public safety or affordability. Given the terrible track record of the SMP, the Commission must do more to ensure the program is reformed.

Public safety should be prioritized in the completion of the SMP. Multiple parties to the case have demonstrated the inadequacies of the Neighborhood Approach and provided viable alternatives. Leaks have increased over the time of the SMP, demonstrating a failure of the program to appropriately prioritize the most at-risk pipes for replacement. The Commission should direct Peoples to adopt a more effective system for prioritization.

The ever-expanding estimates for the cost of the SMP are alarming and one of the reasons the Commission ordered this investigation. Peoples ratepayers already pay the highest gas rates in the state and for many affordability is already a problem. Allowing the program to continue as is will place an undue burden on hundreds of thousands of ratepayers and constitute a failure of the Commission to ensure “least cost” service. The order mistakenly punts on dealing with the cost of the program. The Commission has the authority to set spending parameters on the program and should.

Again, I urge the Commission to reverse or amend the Proposed Order and fulfill its regulatory obligation by directing Peoples to appropriately prioritize public safety and better control the cost of the program.

Thank you for the opportunity to provide comment.

 

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