Madigan Seeks Probe Of Peoples Gas Main Replacement Program

CHICAGO (CBS) — Illinois Attorney General Lisa Madigan has asked the state’s utility regulators to launch an investigation of Peoples Gas, in light of an audit which revealed a gas main replacement program could cost customers $8 billion.

“I sat up and read this, and was absolutely appalled,” Madigan said Monday.

Madigan said an independent audit of the Peoples Gas Accelerated Main Replacement Program revealed skyrocketing costs for consumers. Originally estimated to cost $2.2 billion when it was first approved in 2009, the pipe replacement program could now cost $8 billion, according to an audit by Liberty Consulting Group.

The attorney general’s office has called on the Illinois Commerce Commission to investigate whether Peoples Gas violated the Public Utilities Act by withholding the increased cost estimate when Peoples Gas merged with Wisconsin Energy Corp. A second petition asked the ICC to investigate the restructuring of the pipe replacement program.

“I felt that it was imperative that we file these petitions to ensure that the ICC does what it needs to do to bring this program under control, but also to make sure that the public knows that there is a grave disservice going on,” she said.

The audit of the program found the main replacement program would cost every residential heating customer an average of nearly $7,700 over the remaining life of the program, slated to be completed in 2030.

The report called the program “out-of-date and out-of-touch” and recommended it be completely overhauled.

Peoples Gas said in a statement saying in part, “We have now assembled an experienced construction management team and hired a nationally known firm to develop a bottoms-up cost and scheduling model. We will provide the results of that review to the Illinois Commerce Commission by November 30th. We will continue to cooperate with all stakeholders, including the Illinois Commerce Commission and IL Attorney General.”

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