At a time when so many other homeowner costs have gone up — water bills, property taxes and sales taxes — gas bills can and should be dialed down.
City residents are getting hit with higher gas bills because Peoples Gas has revved up efforts to replace creaky iron mains and poorly designed joints that are as much as 160 years old.
Without a doubt the mains need replacing, but the job could be rolled out over a longer period of time, as several major consumer advocate groups have argued. Peoples Gas should focus first on the gas mains judged to be at risk of malfunctioning, particularly since the replacement program is running vastly over budget.
Originally estimated in 2007 to cost about $1 billion, the modernization project now could cost as much as $11 billion, according to Illinois PIRG.
Last year, average utility customers saw an extra $74.90 on their annual gas bills just to pay for the accelerated pipeline replacement program, and that’s likely to shoot up to $60 or $70 a month at the program’s peak, consumer advocates say. In 2016, then-Attorney General Lisa Madigan’s office estimated the program would cost the average residential heating customer $7,700 over 20 years.
That’s asking a lot from ordinary Chicagoans who are just scraping by.
“We go all around the city and hold utility bill clinics,” Bryan McDaniel, director of governmental affairs for the Citizens Utility Board, told the Sun-Times Editorial Board last week. “We sit down with people and go through the bills. Constantly we hear: ‘What’s going on with Peoples Gas bills?’ ”
Last year, 253,489 of Peoples’ 869,000 Chicago customers were at risk of disconnection because they were behind on their payments — a startling statistic that alone tells the story. We don’t think 29 percent of Chicago homeowners and renters are casually stiffing the gas company.
In the 10th Ward on the Southeast Side, Ald. Susan Sadlowski Garza says many of her constituents simply can’t absorb the higher costs. And even in the comparatively well-to-do 47th Ward, Ald. Ameya Pawar tells us that his constituents are struggling with the double whammy of cold weather and higher gas rates.
“It calls for hearings,” Pawar said.
Ald. George Cardenas (12th), meanwhile, has introduced a resolution calling for Peoples Gas CEO Charles Matthews to explain why average winter heating bills are substantially higher in the city than in the suburbs.
The U.S. Pipeline and Hazardous Materials Safety Administration wants all the nation’s aging iron gas mains replaced, and Peoples Gas says it has attended to about 43 percent of its 2,000 miles of outdated pipelines. Once the job is finished, Peoples says, there will be fewer interruptions in gas service and fewer repairs.
Also, the new mains will allow Peoples to switch its system from low pressure to medium pressure, which will allow commercial and industrial customers to operate specialized tools and equipment without a pressure booster. The higher pressure also will allow the utility to switch from interior to exterior meters.
Peoples is funding the accelerated pipe replacement program under 2013 state legislation that allows it to collect money through an upfront surcharge without going through the normal rate-review process. But we agree with legislators who say it’s time to make the utility justify what it is spending before it gets more money, particularly since the program has expanded from replacing gas mains identified as risky to an overall system upgrade.
“My main motivation is to protect the seniors and low-income residents in my districts from these rapidly rising costs,” said state Rep. Theresa Mah, D-Chicago, who is co-sponsoring a bill that would require Peoples Gas to go through the traditional process of justifying rate increases. “I see residents every day who are having a hard time. … We are talking about people who are literally hungry, who don’t have enough money at the end of the month.”
Peoples Gas spokeswoman Danisha Hall said the utility opposes the bill because it would “undo years of progress” toward making Chicago’s gas mains safer. But Vikki Ortiz, director of communications for AARP Illinois, says her organization is making the bill its top priority for the current legislative session.
Meanwhile, Crain’s Chicago Business reported in November that Peoples Gas, which is owned by Milwaukee-based WEC Corp., has amped up its campaign contributions by about five times its normal level.
It only makes sense to replace gas mains that everyone agrees have to go. But it should be done in a way and on a schedule that the average Chicagoan can afford.
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