Peoples Gas filed an emergency motion with the Illinois Commerce Commission on Friday urging regulators to allow them to continue work on a controversial pipeline replacement program next year, or else risk leaving some customers with meters “dangling” dangerously from their homes and hundreds of union workers out of jobs.
In a sweeping ruling last month, the Illinois Commerce Commission put a halt to the utility’s perennially delayed and over-budget pipe project, pending an investigation into what consumer watchdogs have long derided as a mismanaged waste of ratepayer dollars.
Regulators ordered Peoples Gas to cut $265 million in spending for the project, but the utility says it needs to dedicate $134 million to wrap up “critical safety and reliability work” that’s already underway before they can safely comply with the commission’s ruling.
The company asked the commission to “allow it to finish projects that are already in progress, to avoid having duplicate systems in place, metal plates on streets in disrepair, traffic barrels and barricades in place, and meters left dangling on customer residences and businesses,” it wrote in the 19-page filing.
In a statement, a Peoples Gas spokesman added the utility “is working to minimize job losses as part of the ICC’s order to pause the work, but knows several hundred jobs will likely be lost — mostly union construction jobs.”
When they handed down their Nov. 16 decision, the commission said in a statement the “pause will not remove any funding related to emergency response to leaks, pipe breaks, or other critical safety measures.”
Peoples Gas disputes that and asked for the commission to “clarify” its order by Wednesday.
Abe Scarr, director of the Illinois Public Interest Research Group, suggested the utility’s request was an effort to recoup some of the money commissioners took away when they slashed a record-high rate hike request of $402 million from Peoples Gas down to $301 million. That’s still an all-time high and is expected to add an extra $6 to the average monthly Chicago household bill starting in January.
Approving the emergency funding would tack on an additional $9.1 million to the rate hike, according to Illinois PIRG.
“Nothing in the order prohibits Peoples Gas from making prudent safety investments or appropriately concluding in-progress projects,” Scarr said in an email. “If Peoples Gas remains confused, we encourage the Commission to provide clarification without restoring any of the pipe replacement budget.”
Sarah Moskowitz, executive director of the Citizens Utility Board, called it “outrageous for Peoples Gas, which has been rolling in six straight years of record profits and just received a record rate hike, to claim that it suddenly doesn’t have the resources to conduct repairs to its system and pay its workers.”
“This is further proof that the ICC did the right thing when it issued a long-overdue order that the utility pause this needlessly expensive program — pending an ICC investigation — that after 10 years had not yielded any significant safety improvements but has caused a dire affordability crisis for customers who have seen their bills skyrocket,” Moskowitz said in a statement.
In 2007, Peoples Gas put a price tag of $1.7 billion on the massive plan to replace about 2,000 miles of old pipes that deliver natural gas to Chicago homes, but — before the ICC stepped in last month — costs were expected to land well over $8 billion by its completion in 2040.
Consumer advocates have long complained the project hasn’t prioritized neighborhoods with the most pressing needs and passed on rising costs to ratepayers who have been hit with monthly surcharges to fund the project. The current $15-per-month surcharge expires at the end of the year under state law.
Peoples Gas has maintained it’s the cost of keeping infrastructure safe and reliable. Ed Maher, spokesman for International Union of Operating Engineers Local 150, said the replacement program is “badly needed on a system where the majority of pipes are more than 80 years old.”
Unless the commission approves the funding, about 1,000 jobs will be lost before Jan. 1, according to Maher, including about 200 from his union. Maher suggested the commission could have ordered a study of the program without cutting funding.
“What they’ve done here is not only halt the modernization program, but they’ve wiped out funding for emergency repairs … It’s playing a very dangerous game, putting people out of work and threatening the safety of the system,” Maher said.
The commission next meets Dec. 14.
