Last year, Peoples Gas was granted a $303 million natural gas rate hike in Illinois as a result of its gas pipe replacement program. Now, some experts are calling for the program to be overhauled.

Illinois Public Interest Research Group filed expert witness testimony detailing multiple fundamental errors in Peoples Gas’ methods of prioritizing risk reduction to protect public safety. The testimony was among several filed by Illinois PIRG, the Office of the Illinois Attorney General, the City of Chicago, Gas Workers Local 18007 and the staff of the Illinois Commerce Commission as part of an ICC investigation into the Peoples Gas program to replace underground iron gas pipes, known as the System Modernization Program.

The expert analysis sheds new light on why the plan, launched in 2011, has failed to accomplish its public safety objectives despite Peoples Gas spending billions of dollars, leading to the largest gas utility rate hike in Illinois history.

“They’ve had a track record for many years that they spent billions of dollars but pipeline safety incidents have increased, so we’ve known that something is wrong,” said Illinois PIRG Director Abe Scarr.

Economist Jonathan Lesser and engineer Charles Feinstein recommended a methodology, which would allow Peoples Gas to optimize investment to reduce risk. They believe the transparent, reproducible methodology can achieve greater risk reductions while costing Chicagoans less.

Illinois PIRG wants the expensive program reigned in.

“Absolutely, yes, we are calling for an overhaul of the program to cost less while making us safer and support the transition to clean energy over time,” said Scarr.

Peoples Gas released the following statement.

“We appreciate the strong support from the ICC’s safety staff and the Illinois Attorney General for continuing the critical work of removing rapidly corroding pipes that date as far back as the 1800s," the utility said. "These experts, along with others who filed testimony, have made very clear the work is needed for Chicagoans’ safety, for reliability in the heating system, and for environmental sustainability.”

The state investigation into the modernization program will continue until next January.