Infrastructure Modernization in Illinois

Pursuant to settlement, the Illinois Commerce Commission has directed a natural gas local distribution company (LDC), Peoples Gas Light & Coke Company, to reduce by $5.4 million its recovery of investments made in infrastructure improvement projects in 2014.

The agreement resulted from complaints about significant cost overruns, major construction delays, and a general lack of proper management oversight of the system modernization program (SMP) implemented by the LDC four years ago. The stipulation calls for customers to receive a refund and for Peoples Gas to institute new tracking and reporting practices, under which it will be held accountable for any ongoing failures to address cost overruns and nonperformance of construction milestones.

The company’s 20-year SMP was focused on the replacement of 2,000 miles of cast iron and other aged mains, but it also included upgrades to 300,000 customer service lines as well as the relocation of gas meters from inside customer premises to outside. In adopting the proposed settlement, the commission highlighted the fact that it was specific to the 2014 SMP compliance year. It noted that formal investigations into the prudence of similar program costs for 2015 and 2016 are still pending before the commission. (15-0209)