Dec. 17--State regulators on Wednesday said they had "suspended" Peoples Gas' wildly-over-budget Accelerated Main Replacement Program -- but admit it won't stop a single Peoples Gas worker from doing what he or she was going to do anyway.
The peculiar announcement from the Illinois Commerce Commission's Chairman Brien Sheahan that the ICC is "suspending the program as we know it" came with a caveat that, for safety reasons, "the physical work of repairing, rehabilitating and replacing high-risk pipe cannot come to a halt."
Spiraling costs on the long-term project to replace aging pipes under Chicago's streets -- which was originally slated to cost $2.6 billion but was recently estimated by Peoples at $6.8 billion -- have put pressure on the ICC to be seen to be acting. That pressure only increased in recent months amid allegations that Peoples Gas executives hid the ballooning cost estimate from regulators to grease the approval of a $5.7 billion merger between Peoples Gas' parent company, Integrys, and Wisconsin Energy.
Last month the ICC voted to investigate the testimony of Peoples Gas and Integrys executives who did not disclose an even higher cost estimate of $8 billion when they appeared before the commission this summer. Integrys executives were in line to pocket $34 million in stock and cash when the deal subsequently closed, according to an SEC filing.
Even a $4 billion project cost would double the base rates 800,000 Chicago-area customers pay, and the project could cost the average consumer $7,700 over the next 20 years, Illinois Attorney General Lisa Madigan has warned.
The ICC's decision Wednesday that it would "suspend" the long-term mains renewal program amounts to an announcement that it will issue a report in May 2016 that will form the basis of binding requirements for a revamped mains replacement program. Six open workshop meetings beginning Jan. 11 will give the public a chance to weigh in on that plan, the ICC said.
Peoples Gas spokeswoman Jennifer Block welcomed the ICC's decision and said that the company agrees that "continuing to invest in modernizing our infrastructure to make it safer and more reliable is the right thing to do."
A slowdown in mains renewal work over the winter months means that even if the ICC had demanded an immediate halt, it would likely have had minimal impact.
kjanssen@tribpub.com
