Illinois overhauls Peoples Gas pipeline program, mandates focus on high-risk pipes
(UI) — The Illinois Commerce Commission (ICC) has ordered Peoples Gas to retire high-risk cast iron and ductile iron (CI/DI) pipes in its natural gas distribution system by 2035. The decision clears the way for the utility to proceed with its multibillion-dollar initiative to replace underground natural gas pipelines across Chicago.
The directive replaces the utility’s long-criticized System Modernization Program (SMP), which faced cost overruns and scrutiny over its prioritization of pipe replacements.
The ICC launched an investigation into Peoples Gas at the start of 2024 after pausing the SMP the previous year. Regulators determined the utility had not been adequately focusing on removing the most risk-prone pipes and needed a more targeted approach.
"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. However, these projects cannot come at unreasonable or unjustifiable costs to customers," said Acting ICC Chairman Doug Scott.
The Commission’s ruling aligns with recommendations from engineering experts, ICC staff, and the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA). A newly established "Safety Monitor" will track Peoples Gas’ progress on pipe retirements, and financial penalties could be imposed for noncompliance.
"Chicagoans deserve a safe, reliable gas system. The record in this investigation shows that Peoples Gas was not prioritizing the removal of CI/DI pipes, but rather pursued it as one of several components of its System Modernization Program. As a result, the CI/DI retirement rate slowed over time," said ICC Commissioner Stacey Paradis.
The order does not immediately impact customers’ bills. Any cost recovery would need to be approved in future rate cases under the Illinois Public Utilities Act, which requires utilities to demonstrate that expenses are just, reasonable, and prudently incurred.
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