Aldermen Introduce New Resolution Demanding End To Reckless Spending By Peoples Gas To Prevent Crisis In Chicago

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Oct 16, 2019, 16:02 ET

CHICAGO, Oct. 16, 2019 /PRNewswire/ -- Seventeen aldermen on Wednesday showed their support for a resolution urging Gov. J.B. Pritzker and the Illinois General Assembly to pass reforms to stop out-of-control spending in Peoples Gas' controversial pipeline-replacement program. The resolution is a sign of growing concern that skyrocketing natural gas bills could spark a heating-affordability crisis in Chicago in future winters.

A similar resolution passed out of committee in the spring but ran out of time. The new resolution, introduced by Ald. George Cardenas and co-sponsored by at least 16 aldermen, was assigned to the Committee on Environmental Protection and Energy. But consumer advocates like the Citizens Utility Board (CUB) and Illinois PIRG hope it will soon move to the floor of the City Council for a full vote.

"The Peoples Gas pipe-replacement program is a poorly designed, mismanaged, bad deal for Chicago," Illinois PIRG Director Abraham Scarr said. "We thank the Chicago City Council for taking this issue up, and call on Governor Pritzker and the General Assembly to take action next session to rein in this troubled program."

"We hold events all over the city, and we're constantly hearing from consumers who ask: 'What's going on with my Peoples Gas bill?'" said Bryan McDaniel, CUB director of governmental affairs. "We are deeply concerned that if state officials don't take decisive action, Chicago will plunge into a crisis where even more people can't afford their heating bills. We don't have time to wait, so we're thankful to members of the City Council who have joined us in this fight."

Peoples Gas' System Modernization Plan (SMP) is slated to last until 2035-2040, replacing nearly 2,000 miles of cast iron gas mains with plastic pipes. While agreeing that aging, hazardous pipes need to be replaced, consumer advocates say the program is over-budget, has an overly aggressive spending pace, and has been missing its goals.

A 2015 audit ordered by state regulators uncovered rampant mismanagement, and the SMP's projected costs have skyrocketed from $4.5 billion to about $11 billion. The reckless spending is taking its toll: Peoples has said that about 92,000 customers—15 percent—were threatened with disconnection last year. It's likely to get worse: An analysis by former Illinois Attorney General Lisa Madigan's office estimated that over the next 20 years the program could help double gas bills and cost the average customer $7,700.

Peoples Gas is legally obligated to replace hazardous pipes in a cost-effective manner. But consumer advocates argue that the gas utility has exploited the program as if it were a blank check. In the last legislative session, a proposal to subject the SMP to more regulatory scrutiny (House Bill 3044) stalled.

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. For decades, the group has stood up for consumers, countering the influence of big banks, insurers, chemical manufacturers and other powerful special interests. 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. Since then, CUB has saved consumers more than $20 billion. For more information, call CUB at 1-800-669-5556 or visit www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board