City Officials Send Strong Message To Springfield: Peoples Gas Must Be Reined In

FOR IMMEDIATE RELEASE: April 24, 2019
CONTACT: 
Jim Chilsen, (o) 312-263-4282, (c) 312-513-1784

After hearing testimony about residents struggling to pay their rapidly rising utility bills, a City Council committee on Wednesday passed a resolution calling for more transparency from and oversight of Peoples Gas.

The resolution also urges Illinois lawmakers to pass reform legislation to rein in the out-of-control spending by Peoples Gas because of its mismanaged and ineffective pipeline-replacement program, the “System Modernization Plan.”

“We are grateful that Chicago’s elected officials, especially Ald. George Cardenas and Ald. Brendan Reilly, took this important step in speaking out on behalf of Chicagoresidents who are paying up to 80 percent more for natural gas than people in the suburbs,” said Bob Gallo, AARP Illinois State Director. “These high costs have become a citywide crisis for all Chicago residents, especially older adults who tell us every day that rapidly escalating gas bills make them worry that they will eventually have to leave the homes they love.”

Peoples Gas’ SMP is slated to last until 2035-2040, replacing nearly 2,000 miles of cast iron gas mains with plastic pipes. Since a 2015 audit ordered by the Illinois Commerce Commission (ICC) uncovered rampant mismanagement, the SMP’s projected costs have skyrocketed from $4.5 billion to as high as nearly $11 billion—and more recently the company said it didn’t know what the final price tag would be. An analysis by former Illinois Attorney General Lisa Madigan’s office estimated that the program could help double gas bills over the next 20 years.

SR2018-837 was approved by committee members during a status hearing of the city’s Health & Environmental committee. At the hearing, committee members had the opportunity to listen to representatives from Peoples Gas as they explained their pipe replacement program.

They also took testimony from several citizen advocacy groups who shared research showing that the Peoples Gas program has an overly aggressive spending pace, is over budget, and has not been meeting its goals. Advocates, including AARP Illinois, the Citizens Utility Board, and Illinois PIRG warned that the program could double gas bills in years to come, hitting seniors and people on a fixed income especially hard.

“Peoples Gas tries to argue that this is about safety, safety, safety,” said Bryan McDaniel, executive director of the Citizens Utility Board. “But we know from research that it is actually about profits, profits, profits.”

Cardenas, the chair of the Health & Environmental Protection committee, had pushed for months to hold the hearing on the problem.

 “As Chairman, it is my responsibility to bring greater transparency and oversight to a program that has been plagued by scandals and misinformation,” Ald. Cardenas said before the hearing. “Peoples Gas’ rate of pipe replacement simply does not correspond to their dramatic increase in capital spending.”

The resolution encourages the Governor and state legislators to pass reform legislation to reign in the out-of-control spending by Peoples Gas. AARP Illinois, CUB and Illinois PIRG hope the city resolution will send a forceful message to state lawmakers that they have the power – and responsibility – to develop solutions that will protect unsuspecting Chicago residents from unfairly high bills.

“There has to be a way in Springfield for state legislators to protect hardworking Chicago residents, retirees and other vulnerable constituents who are pleading for their help on this utility crisis,” said Julie Vahling, Associate State Director for AARP Illinois. “Our 250,000 members in Chicago voted for elected officials they believed would protect and address the concerns of themselves and their families. They are asking for those leaders to come through for them now.”

AARP is a nonprofit, nonpartisan organization, with a membership of 1.7 million in Illinois. It is dedicated to advocacy and outreach for people 50+ and their families Learn more at http://states.aarp.org/region/illinois/.

Illinois PIRG is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security or our right to fully participate in our democratic society. Learn more at www.illinoispirg.org.

CUB is Illinois’ leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. For more information, call CUB’s Consumer Hotline at 1-800-669-5556 or visit www.CitizensUtilityBoard.org