Gas bills could double in coming years, attorney general warns

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Peoples Gas customers should brace for their monthly bills to raise dramatically due to a costly pipeline repair project that could double consumer bills. (WLS)

Peoples Gas customers should brace for their monthly bills to raise dramatically due to a costly pipeline repair project that could double consumer bills in the next 14 years, according to Illinois Attorney General Lisa Madigan.

Residents of Chicago already pay the highest rates for natural gas in the Midwest. Critics of Peoples Gas pipeline replacement strategy said it's inefficient and warn it's bad for consumers' wallets.

"They are asking rate payers to pay an exorbitant amount of money to fix a problem that Peoples caused in the first place by not replacing pipes consistently throughout the years," said Madigan.

Madigan said the price of gas will double for Peoples Gas customers in less than 15 years if its system modernization program continues to replace the pipeline neighborhood by neighborhood. A 2015 audit revealed the cost of the project had grown from $2.5 billion to more than $8 billion.

"The audit also showed that it appears Peoples is not prioritizing properly, not doing this work properly so the ICC needs to exert more control to make sure the costs are reigned in and make sure that older dangerous leaky pipes are replaced first," said Madigan.

Peoples Gas said Madigan's accusations that there are any threats to customers is simply wrong. Peoples defended it's "neighborhood by neighborhood" plan, saying there is no danger customers.

The Citizens Utility Board said the gas company should use technology called methane mapping to detect leaks that it said waste millions.

"This would be a way to make the pipeline replacement program much more cost effective," said the Citizens Utility Board.

Peoples Gas disagreed, saying "...we believe the cost, security and safety risks out-weigh the benefits of this fairly new technology. A proposed order before the ICC supports our position."

The Attorney General disputed Peoples' new $6.8 billion estimate adding that the cost could potentially balloon over $9 billion. Peoples Gas said it expects the project to raise consumer bills by 2.7 percent annually, less than Madigan's estimate.

"We can't predict the cost of bills 14 years from now because there are various components that make up a bill such as taxes and the cost of commodity. What I can tell you is that the investment portion of the residential heating customer bill is expected to increase by approximately 2.7% annually based on a $6.8 billion estimate, until 2030," said Peoples Gas.

The Illinois Commerce Commission decision about how to proceed with the pipe replacement program could happen as soon as next week.

The ICC will look at opinions filed by it's staff, Peoples Gas, and CUB.
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