ICC approves stronger oversight plan for Peoples Gas modernization program in Chicago

Published on January 12, 2018 by Chris Galford

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A project to replace aging natural gas pipelines throughout Chicago has come under new scrutiny, with Illinois Commerce Commission (ICC) approval of a new oversight plan that includes stronger regulatory oversight.

The System Modernization Program (SMP) is being run by Peoples Gas Light and Coke Company (Peoples Gas), but the Commission seeks to guarantee both the project itself and its costs are being kept in line. As of today, the replacement project will include 2,000 miles of at-risk mains, upgrades to 300,000 customer service lines and relocation of gas meters from inside customers’ property to outside. It is set to take around 30 years. All this has the potential for infrastructure plant riders–which the ICC must in turn review and approve beforehand.

“Today’s decision puts the safety of Peoples’ ratepayers first and charts a new path forward for the ICC’s oversight of the SMP,” ICC Executive Director Cholly Smith said. “Chicago’s natural gas distribution system is one of the oldest in the country and our priority must be ensuring it remains safe for the people of Chicago. Strict oversight by the ICC will help put this vital public safety project back on pace while ensuring the company follows the steps necessary to keep costs down to protect ratepayers.”

Under the new demands, long-term annual and quarterly reporting, and performance metrics will be required to chart the company’s progress and cost management. New reporting metrics will be put in place for such progress monitoring and two new consultants will be hired to assist the ICC in auditing the cost of the SMP and evaluate ongoing project management. A pilot program will also be launched through 2021 that will determine the value of advanced methane detection technology, with Peoples Gas required to submit annual reports to the ICC regarding methodology, benefits, and results of annual methane leak flow rate reduction and other potential uses.