Editorial: Put the heat on Peoples Gas execs
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If the cost of heating your home soon becomes unaffordable, feel free to blame top executives of Peoples Gas and its former parent company, who apparently have failed to play straight with state regulators and the public.
The Illinois Commerce Commission would be wise to slow down or freeze a $8.2 billion Peoples Gas project to replace 2,000 miles of aging gas mains in Chicago — at least until the company can better justify the costly upgrades. And the ICC should impose the heaviest possible fines on Peoples Gas if it proves true the company and its former parent, Integrys Energy Group, deliberately misled the state about the high cost.
More to the point, we urge Illinois Attorney General Lisa Madigan to press criminal charges against any executive who knowingly misled the ICC last year so as protect a deal to merge Peoples Gas with a Milwaukee company, Wisconsin Energy. That merger, according to Crain’s Chicago Business, proved lucrative to five top executives of Integrys, who together stood to collect $61 million in cash, stock awards and the cancellation of restricted stock and options once the deal closed.
Fines don’t always scare big companies, who pass the cost along to customers. Criminal charges, though relatively uncommon, get their attention.
In a filing earlier this month, Crain’s reports, Madigan said Peoples Gas and Integrys “knowingly misled and withheld material information” from state utility regulators on the soaring costs of replacing the old pipelines. Not until after the ICC had approved the sale of Peoples Gas to Wisconsin Energy — then renamed WEC Energy — was it revealed that the 20-year project would cost an estimated $8.2 billion — far more than the $4.6 billion estimate provided to the ICC.
Why did Integrys fail to report the $8.2 billion estimate, which it had in hand, before the merger was done?
“It is reasonable to question whether the completion of the merger would have been impacted by (the company’s) disclosure of the estimate, and whether completion of the merger was the primary concern of Integrys executives given the tremendous financial incentives that were conditioned upon the completion of the merger,” Madigan’s office stated in testimony filed Feb. 4 with the ICC.
A small group of insiders, that is to say, stood to make an awful lot of money.
Madigan’s office estimates the pipe replacement project, if not restructured, will cost the average residential heating customer $7,700 over the 20 years.
Think of it as an “outsider’s tax.”
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