Peoples Gas bill surcharge under scrutiny from watchdog groups, Gov. Pritzker's office

CHICAGO (WLS) -- A surcharge on Illinois gas bills is now under scrutiny by both a consumer watchdog group and the governor's office.

If you look closely at your Peoples Gas bill, you'll see a surcharge that the company says fluctuates based on your bill. The money is being used to overhaul rusty and leaky gas pipes, but critics question the spending.

"The budget estimates about $7 billion; that's over a 30 year period. So that's an awful lot of time. We know it's a large number, but we recognize a new system, over 200,000 new safety devices installed, it's a lot of work, so we're pleased with where we are," said Andy Hesselbach, senior vice president of operations for Peoples Gas and Northshore Gas.

RELATED: Peoples Gas draws criticism for high cost of line replacement project

Peoples Gas is so pleased with the progress of its System Modernization Program that company leaders invited the I-Team to see progress being made. In the Wicker Park neighborhood and all over the city, century-old, corroded and sometimes leaky pipes are being removed and replaced with new, polyethylene plastic.

The project comes with a cost: the surcharge on your bill.

"We understand that the cost of the program itself is going to be a challenge to the most vulnerable customers we have, and as a company we have put in. since 2019, over $60 million plus in Bill Pay Assistance programs," said Bala Kattappuram, with Peoples Gas Planning and Project Management.

The consumer watchdog group Illinois PIRG has been critical of the plan since the budget grew by billions of dollars about 5 years ago.

"Legislators were told the average cost to a People's Gas customer would be around $1.14 per month. Over the last three months over the summer, the average people's gas customer paid $11.50. And this is during the summer months when people are not using much gas; that's almost 20% of your bill. We think that is a very high cost to be paying," said Illinois PIRG Director Abe Scarr.

WATCH: Peoples Gas addresses criticism of System Modernization Program
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People's Gas addressed the criticism of its System Modernization Program, including accusations they're upgrading the entire gas system without justification.



Peoples Gas said the overall average surcharge is about $10 per month. Currently, the company files quarterly reports with the Illinois Commerce Commission on its progress, but PIRG and Governor JB Pritzker want more regulation.

"The current planning process hurts consumers and it's imperative that legislation include reforms which expand consumer affordability protections such as mandating that any surcharges go through the ICC's ratemaking process," the governor's office told the I-Team.

In a statement, Peoples Gas said the program "...already has strong built-in consumer protections and regulatory oversight... that ensure stability and ultimately, reduce the overall costs for our customers..."

The utility added that some costs are higher now in residential neighborhoods with safety top of mind during the pandemic, but the company has been able to speed up sections of the project in the loop while activity there has been quiet. The company also said the program creates 2,000 jobs annually in the Chicago area.
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