Editorial: Peoples Gas program socks Chicagoans with unnecessarily high bills

By Chicago Sun-Times Editorial Board. Feb. 28, 2021

…Chicagoans shouldn’t have to worry about soaring gas bills every time they turn on the heat or boil a pot of water.

Peoples Gas is in the middle of a program to replace some 2,000 miles of natural gas mains under the streets, sidewalks and parkways of Chicago, but it is behind schedule and way over budget. Already, customers are shelling out about 10 times as much for the work, in the form of a surcharge, than the Legislature was told it would cost when it authorized the program in 2013. Wholesale gas prices are low now, but there is no guarantee they will stay low. If nothing is done, gas bills could grow increasingly unaffordable….

About a decade ago, Peoples Gas set out to accelerate the replacement of old gas mains. The riskiest mains are largely made of cast iron and ductile iron pipes, which can leak and cause explosions when gas escapes. It’s a problem cities face around the country. New pipes are made of polyethylene, which does not corrode. As of January 2019, Peoples had 1,742 miles to replace. Today, the company still has 1,706 miles to replace. That’s a long way to go.

Critics say the program’s cost is soaring because Peoples is doing more than targeting just the riskiest pipelines. It is also replacing mains that are not high-risk….

Originally projected in 2007 to cost $1.4 billion, Peoples’ System Replacement Program could end up costing $8 billion to $11 billion when work is completed in 2040. As the Sun-Times recently reported, the surcharge is costing the average Peoples Gas customer in Chicago an extra $131 last year, a figure that could rise to $174 by the end of this year. So far, less than a third of the pipes have been replaced….

Last week, state Rep. Joyce Mason, D-Gurnee, and Sen. Ram Villivallam, D-Chicago, introduced legislation to eliminate the surcharge tacked on to heating bills by the end of this year instead of in 2023. The legislation is similar to bills that went nowhere in the last two sessions. (Note from CUB: You can take action to support the legislation here.)

But now the idea is backed by Mayor Lori Lightfoot, who last year said she worried that higher heating bills could drive Chicagoans from their homes. The concept is also now supported by the Chicago City Council and (Gov.) Pritzker….

If natural gas were Chicago’s future, it might make sense to upgrade as many pipelines as possible immediately. But Illinois has set a goal of transitioning to renewable energy by 2050, a time when gas customers will have yet to pay off the amortized cost of the pipe replacement program. The Citizens Utility Board argues that geothermal energy — heat from the Earth — is a now-plausible eco-friendly alternative to gas…

Peoples’ pipe replace program is needlessly expensive…

To read the full Sun-Times editorial, click here.