BIll would end Peoples Gas infrastructure surcharge

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An Illinois House member has introduced legislation backed by consumer advocacy groups that would bar Peoples Gas from imposing surcharges on Chicago households and businesses to help pay for replacing the city’s aging gas pipes.

Rep. Will Guzzardi, D-Chicago, is sponsoring the bill (HB 4898). At a press conference today, he said Chicago’s aging gas mains need to be replaced, but Peoples’ unprecedented capital spending under a 2013 state law is making home heat too costly for too many Chicagoans.

“We believe it’s time for the blank check to end,” he said.

The massive infrastructure program, one of the largest such utility projects in Illinois since Commonwealth Edison’s nuclear-plant construction in the 1970s and 1980s, has turned controversial. Peoples, owned now by Milwaukee-based WEC Energy Group, is insisting on spending $300 million a year in order to finish updating more than 1,500 miles of gas pipes by no later than 2040.

Critics led by Illinois Attorney General Lisa Madigan say that level of spending will lead to sharply higher natural gas rates and make home heating unaffordable for up to a quarter of Chicago’s households in a matter of years.

The utility also has come in for criticism that the sharp increase in spending hasn’t led to significantly more miles of pipe being replaced each year.

The Illinois Commerce Commission last month endorsed Peoples’ plan to spend $900 million on the program over the next three years. Chairman Brien Sheahan publicly expressed disappointment that the utility hadn’t proposed a more modest pace, but he said the state law allowing gas utilities to impose a monthly surcharge on customers to “accelerate” the work tied the hands of his agency.

Sheahan said he would be open to discussions in Springfield on how to provide relief to Chicagoans.

Spokeswomen for the ICC chairman didn’t immediately respond to a request for comment.

Asked whether he had a commitment from House leadership to consider the bill this year, Guzzardi said he was just beginning the process of reaching out to colleagues for support.

He said, too, that he hadn’t yet contacted the ICC. “We’ll certainly be reaching out to them, and we would welcome their support,” he said.

The utility in a statement called the bill “a surprise considering that the initial legislation, which was overwhelmingly approved by both houses of the legislature and signed by then-Gov. Pat Quinn, provides numerous safeguards such as built-in cost caps and thorough ongoing regulatory reviews.”

The utility called its plan “the best approach to modernizing Chicago’s aging natural gas delivery system” and said it addresses “safety concerns that these aging pipes present to nearly 1 million families and businesses.”

WEC Energy has made capital spending increases a central part of its strategy to boost earnings and dividends for shareholders. The company owns utilities in Wisconsin, Michigan and Minnesota in addition to Illinois. Its Illinois utilities (Peoples and suburban sister utility North Shore Gas) posted operating earnings of $237 million, a 14 percent increase, in 2017.

WEC’s larger Wisconsin utilities, by contrast, grew operating earnings by just 4 percent.

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