Lisa Madigan wants investigation of Peoples Gas

In the wake of an independent audit of a Peoples Gas pipe-replacement program, Illinois Attorney General Lisa Madigan on Monday called for the Illinois Commerce Commission to investigate the program.

That audit, by Liberty Consulting Group, found that the Peoples Gas Accelerated Main Replacement Program could cost consumers $8 billion. Originally, the plan, proposed in 2009, was to cost about $2.5 billion.

The program “is in a complete state of disarray,” Madigan said. “The report documents the pervasive problems that are plaguing the program.”

Madigan’s office has filed two petitions with the Illinois Commerce Commission. One seeks an investigation into whether Peoples violated the Public Utilities Act by with holding the cost estimate from the commission. The other seeks a restructuring of program.

Peoples recently merged with Wisconsin Energy Corp. but did not reveal the cost during that merger process, Madigan said. Her office back in March had asked that the companies’ merger be delayed, but the commerce commission voted against that delay.

“This project is a disaster that raises serious questions about the safety, reliability and affordability of People’s Gas service,” Madigan said.

According to the audit report, the number of natural gas leaks has not gone down over the years. Madigan said there is a lack of cost-control as well as failure to maintain essential data that would allow the program to be properly monitored.

“Since the beginning, [the program] has been ineptly run by Peoples Energy,” Madigan said.

Peoples supplies natural gas to about 800,000 customers. According to the attorney general’s office, the pipe-replacement program will cost every customer $7,700 over the remaining life of the project, scheduled to conclude in 2030.

“This cost for a program that is so poorly run is simply unacceptable to Peoples Gas customers who already pay the highest natural gas delivery rates in Illinois,” Madigan said.

And it doesn’t matter if a consumer has chosen to purchase their natural gas through an alternative supplier, a spokesman for the Citizens Utility Board noted – Peoples Gas still maintains the delivery system, which its customers help pay to maintain.

“The fees that we pay on our gas bills in Chicago that support this pipe replacement program – those are fees that everyone pays, no matter if you’re with an alternative supplier or not,” said Jim Chilsen, director of communications at the Citizens Utility Board.