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Peoples Gas pipe replacement is costing Chicagoans more

A vast plan to replace deteriorating natural gas pipes and upgrade the system is not only costing you more, but it’s also behind schedule.

Peoples Gas workers installing a new natural gas pipe in Albany Park in 2019. The utility is replacing deteriorating gas pipes under a program that’s scheduled to take until 2040 to complete.
Peoples Gas workers installing a new natural gas pipe in Albany Park in 2019. The utility is replacing deteriorating gas pipes under a program that’s scheduled to take until 2040 to complete.
Victor Hilitski / Sun-Times file

The average Peoples Gas customer in Chicago paid $131 last year on top of their monthly bills for the utility’s massive pipe-replacement work, according to a report the utility filed Tuesday.

And that figure could hit $174 by the end of this year if it keeps rising at its current pace, a consumer group says.

The added cost amounted to about 11% of the typical customer’s bill.

The Illinois Public Interest Research Group, a nonprofit advocacy group, says consumers are now paying about 10 times the original $1.14-per-month estimate given to the Illinois Legislature when it passed a law in 2013 allowing the utility to bill customers via an added “rider” on their bills for the work.

And the work is behind schedule. About 51 miles of deteriorating gas pipes were replaced last year, fewer than the planned 70 miles, according to the quarterly report Peoples Gas filed with the Illinois Commerce Commission.

The program has been plodding along for well over a decade. Originally pegged at $1.4 billion in 2007, it could end up costing $8 billion to $11 billion by the time the work is finished in 2040.

Peoples Gas said that, although its original cost estimate was too low, a more comprehensive program that it’s undertaking now will result in better, safer service.

Illinois PIRG says that what began as a necessary project to replace aging gas lines for safety reasons has ballooned into a much larger and more expensive program that’s also moving the entire natural gas system from low pressure to medium pressure.

The group says some of the neighborhoods at greatest risk from old, leaky pipes are having to wait years while the utility focuses on the overall system modernization.

And as the decades roll on, it says, improved technology might mean consumers won’t be as dependent on natural gas by the time the work’s done.

Peoples Gas — which serves Chicago — says the change to medium pressure will make the system much safer and includes automatic shutoff valves for each building that can detect and prevent problems such as the explosions and fires that hit about 40 homes in three towns near Boston in 2018. A low-pressure system failed during pipe work there, and one person was killed and many others were injured.

The utility says it tries to plan its pipe-replacement work to coincide with other utilities’ projects, so streets don’t need to be dug up twice.

“We still believe the way that we’re doing it is a better deal for consumers,” a spokeswoman said, adding that the utility has also increased its financial assistance programs over the past year.

Gov. J.B. Pritzker has called for an end to billing surcharges like the one allowing Peoples Gas to tack on the rider for the pipe work. And Mayor Lori Lightfoot and the Chicago City Council have called for stricter state oversight of the pipe replacements.

Read Stephanie Zimmermann’s June 23, 2019, report ‘Gas pain.’
Click here to read Stephanie Zimmermann’s June 23, 2019, report ‘Gas pain.’