ICC orders more oversight of Illinois utility’s pipe replacement project

[February 25, 2025]  By Kevin Bessler | The Center Square

(The Center Square) – A pipe replacement project in Illinois has been given the go ahead to proceed, but regulators want more oversight.

Utility regulators at the Illinois Commerce Commission (ICC) ordered Peoples Gas to refocus its program on the safety risks associated with its leak-prone iron pipes. In 2023, the ICC paused the replacement program to investigate spending, delays and safety risk priorities.

“To be clear, the ICC's decision is not a green light for Peoples' Gas to return to business as usual. It is Peoples' and any utility's responsibility to safely maintain the infrastructure needed to run its system,” said acting ICC chairman Doug Scott. “However, these projects cannot come at unreasonable or unjustifiable costs to customers.”

The ICC issued its decision after it said it scrutinized testimony submitted by the utility, ICC staff, and various intervenors over the 12-month legal proceeding.

Abe Scarr, Illinois director of the consumer advocacy organization Public Interest Research Group (PIRG), said the ICC made it clear they want Peoples Gas to prioritize replacing old gas pipes.

“For the last decade or so, that is not what Peoples Gas has been doing,” said Scarr. “They’ve been combining risk-focused work with broader system modernization work and that’s led to a program that costs a lot more and is less effective at keeping us safe.”

Scarr points to a recent study that estimated that, without reform, the Peoples Gas pipe replacement program would cost an additional $12.8 billion to complete, doubling the amount Peoples Gas customers pay for gas delivery by 2040.

The decision sets a 2035 deadline for Peoples Gas to remove high-risk cast iron and ductile iron pipes from its system and establishes a “Safety Monitor.”

“Who will more closely watchdog the program over the next decade to hopefully ensure that Peoples Gas is appropriately prioritizing safety risk reduction,” said Scarr.

Peoples Gas released a statement following the ruling that said in part:

“As we wait to receive the full Final Order and review it, the Commission made clear it wants us to focus on replacing more than 1,000 miles of pipes by 2035. This direction given by the Commission, compared to the prior approach, may necessitate additional cost and more construction sites disrupting streets across city neighborhoods."

The ICC said the redirected proactive pipe replacement program will not have an immediate effect on customers’ bills.

The Citizens Utility Board (CUB) thanked the ICC for protecting consumers against what they called spiraling costs and intractable waste.

“Regulators stifled spending on work the utility couldn’t justify as a demonstrable safety need,” said CUB executive director Sarah Moskowitz. “In doing that, they refused to succumb to bullying and pressure tactics that Peoples and its allies unleashed on them repeatedly over the past year.”