March 12--The Illinois Commerce Commission on Wednesday said it would investigate allegations of mismanagement of Peoples Gas' $2.2 billion gas main replacement program.
The regulatory department said it will look into allegations detailed in two whistleblower letters, the latest received this week.
The first anonymous letter, delivered to commission attorneys last month, alleged that an audit of the gas main replacement program was being undermined by Peoples Gas parent Integrys Energy Group and Wisconsin Energy Group, which is seeking to acquire Integrys.
The letter, received Feb. 17, received little attention until the commission said it would consider it at Wednesday's meeting.
The commission also voted Wednesday not to release the results of an audit of the gas main replacement program by Liberty Consulting until a final report is ready this spring.
"It's not unusual to keep an interim report confidential. The staff recommended that it not be made public because it's not finished," said Commission spokeswoman Beth Bosch, adding, "All of the parties in the case have read it."
The audit of the program was conducted by Liberty Consulting. An interim draft of the audit was sealed by the commission. But in January, the attorney general's office, as well as the city of Chicago and the Citizens Utility Board, sought to have the interim audit report made public. They filed a motion with the ICC asking that the report be made public because they said the audit would show a program "beset with poor management and dramatic cost overruns." They also allege that the program costs have more than doubled.
Peoples Gas this week dropped its opposition to releasing the interim audit, saying it had nothing to hide.
Peoples Gas is replacing about 2,000 miles of pipe in the city and charging its customers to pay for the project. Peoples is a unit of Integrys Energy Group which is being acquired by Wisconsin Energy for $5.7 billion in cash and stock. The deal is expected to close this year, pending approval from the ICC and other regulatory agencies. A decision by the commission is expected in July.
The commission also voted Wednesday not to extend the merger proceedings beyond the original timeline, as the attorney general's office and the Citizens Utility Board requested earlier this year.
Peoples Gas in a statement said it agreed with the commission's decision.
"We know there is room for improvement in the Accelerated Main Replacement Program and we're already implementing many of Liberty's recommendations. As always, we will fully cooperate with the ICC's decision to investigate the allegations in recently posted anonymous letters."
Tribune reporter Mary Ellen Podmolik contributed.
crshropshire@tribpub.com
