Peoples Gas filed for a $202 million rate hike Monday with the Illinois Commerce Commission to recover projected costs for its accelerated pipeline replacement program. If approved, the rate increase request would raise average residential customer delivery charges by $10 to $11 per month beginning in 2027, the utility said in a news release. The rising natural gas supply cost is a separate charge on customer bills. The rate request is the first by Peoples Gas since the ICC ordered the utility last year to speed up and complete its long-running, multibillion-dollar pipeline replacement program by 2035. There are still 1,020 miles of aging iron pipes remaining under Chicago that Peoples needs to retire over the next nine years. “The work is critical to ensuring ongoing safety and reliability in the system, especially during winter weather like last month’s extreme cold snap,” the utility said in its news release. The ICC review of the filing is expected to last up to 11 months. Peoples Gas was last awarded a $303 million rate hike in November 2023. Consumer groups plan to protest the proposed rate increase Tuesday outside the downtown headquarters of Peoples Gas. “Peoples Gas just received the biggest gas hike in Illinois history in 2023, and it’s all the more outrageous that this new cash-grab comes as Chicago descends into one of the coldest months of the year and far too many families can’t afford to pay Peoples Gas bills amid rising costs for other necessities like prescriptions and groceries,” Jim Chilsen, a spokesperson for Citizens Utility Board, said in a statement. Peoples Gas serves 894,00 residential, commercial and industrial customers in Chicago. The utility has a subterranean network of some 4,600 miles of pipes under the city, including significant stretches of original cast and ductile iron — some dating back to the 1800s — which pose a risk of gas leaks that could lead to an explosion. Launched in 2011, the pipeline replacement program was initially funded by a 10-year legislative rider enabling the utility to automatically pass the costs along to customers. The program, plagued from the outset by cost overruns and delays, was paused by the ICC at the end of 2023 to conduct an investigation into the best path forward after the surcharge expired. In February 2025, the ICC rejected a $7.2 billion proposal by Peoples to modernize its entire system by 2040, ordering the utility to get the pipeline replacement done by 2035 and justify the work in its annual rate hearings to recover the costs. In testimony to the ICC, Peoples said it expected to spend $600 million between now and 2027 to meet the accelerated pipeline replacement schedule. In 2027, Peoples projects to spend $360 million to “retire aging pipes,” which will lead to a $202 million shortfall – the amount the utility is seeking in the rate hike request. The cost of the accelerated pipeline replacement program is expected to ramp up to about $500 million annually by 2028, according to a third-quarter earnings call by WEC Energy, the parent company of Peoples Gas. North Shore Gas, the sister company to Peoples Gas which serves 165,000 customers in the northern suburbs, is seeking a $14 million rate increase in the same filing with the ICC. If approved, that is expected to raise residential customer delivery charges by $5.21 per month beginning in 2027, according to the utility. The proposed rate increases come as customers are grappling with higher energy costs amid an early winter cold snap. Residential gas bills include both supply and distribution charges. While the utilities don’t make any money on the supply end — the natural gas itself — they are responsible for procuring it as efficiently as possible, to hold down the cost paid by customers. Peoples Gas supply prices are at 42 cents per therm in January, up 27% over the same month last year, according to published ICC data. At co-owned North Shore Gas, supply prices are 53 cents per therm in January, an 18% year-over-year increase. Nicor, which is owned by Atlanta-based Southern Co., is the largest gas utility in Illinois, serving 2.3 million customers in suburban Chicago and northern Illinois. Its customers are paying 42 cents per therm for gas in January, a 50% year-over-year increase in supply costs. In November, the ICC slashed a proposed Nicor Gas rate increase by nearly 47% to $168 million. For customers, that translates to an average delivery cost increase of about $4.25 per month beginning with the January bill, the utility told the Tribune. [email protected] ...read more read less