Like it or else on you.
We have Slop right here.
Oh, there she is.
All right.
So trust me.
Woo, fantastic. Hey, good morning,
everybody. Thank you for your patience.
The Committee on Environmental Protection and Energy will now come to order.
Uh, to- today the committee has one agenda item, a subject matter hearing
on Peoples Gas Pipe Retirement Program updates, and its
rate increase filing with the Illinois Commerce Commission.
Uh, we will begin, uh, by establishing a quorum and
doing a roll call. Uh, Chair Hadden is present.
Vice Chair Knudson. Alder
Espada. Alder Ramirez. Alder
Lopez. Alder Tavarez. Alder
Sigcho-Lopez. Alder Cruz.
Alder Rodriguez-Sanchez. Alder Conway.
Alder Riley. Alder Lawson. Alder Clay.
Clay is here, sorry.
Alder Martin. Alder Menah Hoppenworth.
All right, fantastic. Um, we've
got 11 members present, so we have a
quorum. Um, do we have any Rule 59s?
Yes.
Uh, Cruz, Riley.
Is she here, Madam Chair, Cruz?
Perfect, I see Alders Cruz, uh, and Riley,
and, uh, but she's not on the committee.
Um, uh, uh, Cruz and Riley, uh, per Rule 59, could I have
a motion to approve Alders Cruz, Riley, and Alder Mitts, a
non-member of the committee, remote participation?
Alderman Mitts is present.
Alder Mitts.
Gotcha. All right. All those in favor say aye.
In the opinion of the chair, the ayes have it, so Alders Cruz, Riley,
and Mitts, um, will be marked present for today's meeting.
Mitts is a non-member. Do we have any other non-members
present? All right, Alder Villegas, uh, also marking
you present. Thank you. At this time, we will begin public
comment. Uh, public comment is limited to 30 minutes.
Out of respect for everybody's time, each speaker is limited to three minutes.
Um, before we, I call our first public s- uh, comment speaker,
um, I do wanna wish a congratulations to Alder Conway
on the birth of your new child. Congratulations.
Yeah.
Helping, helping Chicago's population growth one, one baby at a
time.
The 34th Ward started growing. I'm happy to, uh, continue.
Well, it's the congratulations. Congratulations.
Um, and then also just for our public watching and present,
um, we do have, uh, the public safety, the Committee on Public Safety
is still happening. Uh, as you saw a bunch of us come in,
about half of the committee members on this committee are also on that
committee. And so you might see, um, alders, um, who head back
over to that committee. Chairman Hopkins recessed briefly so that we could get
quorum, but as you see alders kind of move back and forth, that may be
what's happening. Um, don't think that they just don't wanna hear
you.
Mm-hmm.
All right. Uh,
all right, fantastic. All right,
uh, we're gonna start with Mr. George Blakemore.
Morning.
Did you hear what she said? She said she's gonna have to leave and
probably go back.
Oh, uh-
There's another meeting that's going on.
Can we get some help with the mic?
All right, ma'am, did you hear what she said?
Thank you.
Did you hear the alder lady say they having two
meetings going on? That's the same thing that old loud mouth Mr.
Blakemore been talking about, and she said she probably would have to
get up and go back to the other meeting.
Do you understand what, how egregious and how arrogant
and how corrupt, what's going on? Do you actually
understand? Did you hear her?
And Commonwealth Edison, Peoples Gas, a
monopoly. The Democratic machine is a
evil monopoly.
No check and balance. And the crime that went on with
Burton and all of them because o- of the Commerce Commission,
a monopoly.
And that's why now they finding ultimate ways to
receive your energy. When you depend on
one, it become corrupt.
Did you hear that alder lady say, "We're having another
meeting going on and perhaps I would have to go to the..." Why would you
do that, madam? Why would, why would
y'all set it up like that, madam?
Because you're corrupt.
You don't care about the people waiting. You don't care.
You gonna do what you want to do. You have inconvenienced
everyone in here.
I challenge each one of you here, get rid of
them.You deserve the government
you get. You get the government you deserve.
You deserve better.
You're trained to be on this democratic machine.
Get off of it.
A monopoly is a one-party system.
Did you hear what she said? There's another meeting going on.
As a citizen, you're entitled to go to both of these meetings
and not to jump from one to the other.
They are doing it. They're getting paid to not serve
you. Uh, maybe. Did you hear what she
said? She said there's another meeting going on.
I probably won't be able to stay. I'm on... Uh, uh, uh.
Get rid of all of them. An evil
monopoly. The democratic
machine. Trump. Somebody
needs to clean up this swamp. There's something wrong
here. There's something evil here.
There's something un-American here.
A monopoly. So that's why it's very
important for me to come to these meetings.
Thank you, Mr. Blakemore. Our-
Don't be scared to clap.
Our next speaker is Gabe, uh, uh,
Kropel.
Hello. My name is Gabe, and I'm here with the Public
Interest Research Group. Um, I would like to thank you for
giving me the time to speak on this issue, um, relating to the Peoples
Gas proposal. So specifically, I am here because
I am a-- I live in the city of Chicago and am a student
at the University of Illinois, Chicago.
And at a time where I'm already taking on thousands of dollars in student debt, I
do not need to be paying ten to eleven extra dollars because of
Peoples Gas proposal. And specifically, uh, it is clear
to me that the ICC's decisions to allow these gas companies
to continue spiking rates has em-emboldened them to keep
coming back and asking for more money, especially over the last
decade. Since twenty eleven, the ICC has had a
timeline for this pipe replacement, and at every turn, Peoples
Gas has missed those deadlines and has gone over
their budget. Um, the original budget was one point four billion
dollars. Peoples Gas has already spent over eleven billion dollars on
pipe replacements. And on top of that, the original
timeframe was twenty thirty when this project was supposed to be done.
The new timeframe that they are using as justification for this hearing and
this proposal is twenty thirty-five.
They are asking you and us in this room to spend millions
of extra dollars because they are, they are about to miss a
timeframe by five years. We should not be rewarding companies
for missing deadlines with extra profit that goes into
their hands and not-- and is taken away from the people of
Chicago. And that's why we have to draw the line in the sand
here. Because if we don't, we set the precedent for every
other gas provider in this state to come to hearings and
ex-- and, um, do proposals that cost millions
of dollars that will only serve to increase gas bills
against people that live in Illinois.
And that means they will continue coming back and continue to harm not just
Chicago, but the entire state. And specifically with
Peoples Gas, we've seen that Chicago already has electrification
plans and alternative solutions such as relining that are
cheaper options than what Peoples Gas are proposing.
Giving them unconditional funding will only serve to increase
gas bills for the people of Chicago, while they continue to miss
deadlines and have runaway construction costs that will
end up costing even more than the ten to eleven dollars that this proposal
is already estimated to increase.
So I would urge the Internat-- the Illinois Commerce Commission to
specifically prioritize Chicago's electrification plan and
relining opportunities for pipelines to avoid runaway
construction costs and prevent Peoples Gas from actually
increasing in the city of Chicag-- or increasing its power in the city of
Chicago. This is about setting a standard of taking power away from
corporations that control our city.
Thank
you for your comment. Thank you for your comment.
Our next speaker is Saad
Sadiq.
Good morning. Um, my name is Saad Sadiq.
I'm an energy analyst with the Environmental Law and Policy Center.
Uh, and I'm here to speak about Peoples Gas Pipe Retirement Program.
Our city has a number of leak-prone mains, gas mains that need
attention, but Peoples Gas cannot treat that real need as a
cash cow for runaway construction costs.
But that's how they keep treating this problem.
In twenty twenty-three, seeing the utilities construction program was driving bills
too high, the Illinois Commerce Commission told them to pause and
focus on the highest risk segments and to study retirement and
non-pipeline alternatives. Digging up and replacing a gas main is
extraordinarily disruptive and expensive, and the reality
is that it's often unnecessary. So I propose a couple of other
options that have proven effective locally.
First, no-non-pipeline alternatives.
There are many, but here are a few of the big ones.
Demand response and efficiency programs utilize the ga-existing
gas system better by helping property owners seal up cracks to retain
heat and reduce waste on high demand days.
Electrification and geothermal energy can replace gas with other
sources by swap-swapping gas appliances for electric ones or
using the temperatures from underground to heat and cool.I p-- I
provide an example. Groundwork data, uh, did an analysis in the
Irving Woods, uh, neighborhood, and they found that electrifying a cluster
of one hundred and sixty family homes could avoid five million
in main replacement costs, and the savings can support customer retrofits.
It's often cheaper
and less risky to serve customers with alternatives and retire rather than
rebuild the gas main. Second is relining the pipe.
It is an economic solution. Workers pull a resin-saturated liner through an
existing main, and it hardens, and it creates a strong
pipe within a pipe that seals leaks and restores pressure
performance. Peoples Gas used this approach in Chicago's Canal Port
project, lining about two thousand feet of twenty-four inch main.
They kept gas flowing, cut excavation to a few pits, and shortened the
schedule by weeks.
Not only was the lining less expensive than full replacement, it
avoided the expense of paving, traffic control, and street
restoration, saving millions while improving safety.
Like the old phrase, "To a hammer, everything looks like a nail,"
Peoples Gas is used to replacing pipes, and they're financially
incentivized to do so, so they're inclined to keep doing
it. But there are real risks to replacing
everything. It drives customer bills higher than necessary to keep the system
reliable. Each new main is a sixty-year investment at
least, and as more people switch to electric, the cost
burden falls on a shrinking pool of people.
Gas demand has been declining as Illinois makes progress towards its
decarbonization and climate goals.
We shouldn't be paying to gold plate a system based on last century's
technology. Chicago's choice is not between yes pipelines
or no pipelines, but rather how to deploy each tool more
effectively. Please
see the committee for additional details and references.
Thank you so much for your comments.
Our next speaker is Ian
Herberger.
Good morning. Good morning. Just kind of...
Sorry. My name is Ian Herberger, and I'm here as a part of the Safer, Cleaner
Energy campaign at DePaul. First off, I'd like to thank the Committee of
Environmental Protection and Energy for allowing me to speak on behalf of all
Chicagoans struggling with unnecessarily high gas bills.
In a time of such intense polarization, I have found that this is an issue that
most everyone has agreed on. As you know, Peoples Gas
was tasked with repairing old and dangerous pipes around the city, a project which
started over a decade ago and has yet to benefit our community.
Instead, the pipe, the Pipe Retirement Program has allowed Peoples Gas to spend an
average of two hundred and sixty-five million dollars per year while
failing to meet replacement goals for twenty-three consecutive
quarters. Now, they seek to spend twice that amount every
year in a rate hike that would increase our gas bills by ten to eleven dollars per
month. This is despite the fact that profits for Peoples Gas have increased by more
than four hundred percent since the beginning of this project, while one in
five Chicago households already struggle with debt to Peoples
Gas. Beyond the financial strain they have and
continue to put on Chicago, this project would also lock the city into
fossil fuel use for the next century while the climate crisis in our world
reaches and surpasses dangerous thresholds.
A major city like Chicago could make a huge difference, leading by example with an
increase in clean, renewable energy use.
But this project would greatly hinder any such progress.
Chicagoans deserve better than this.
Time and time again, Peoples Gas has failed to deliver on their proposed
plans at the expense of the people of Chicago.
Allowing them to go through with their new rate hike would be like failing an open
book test. It is clear that their plan is seriously flawed,
and more money out of people's pockets has clearly not been a viable
solution, as they have only continued to demand
more. A change must be made. On behalf
of everyone in Chicago, we are asking that the ICC reject Peoples Gas
proposal and hold them accountable for the burden they have put onto
Chicago. Thank you very much for listening.
Thank you for your comments. Our next
speaker is Alethea
Oakley.
Good morning. My name is Alethea Oakley, and I'm here with the Peoples
Interest Research Group. I want to begin by thanking the commission for the
opportunity to speak today. I would like to comment on the
affordability of this proposed rate hike.
To ensure the people of Chicago can afford basic necessities, the
commission must significantly lower the Peoples Gas rate
hike. I currently live on the South Side of Chicago and have worked with
multiple local organizations on similar issues.
These experiences have connected me to the wonderful community that makes
Chicago the great city it is. However, much of this
community is struggling, living paycheck to paycheck and choosing between
basic needs. In fact, seventeen percent of
Peoples Gas customers are in debt to this utility, and in some
zip codes, this is one in three households.
Some must choose between heating their homes and buying groceries, even in
brutal Chicago winters.
A proposed ten dollar increase each month will only make this
worse, forcing more families to choose between
necessities and paying their utility bills.
This isn't fair to the Chicago community and these people that make our city the
great place it is.
This rate hike should be lowered, as customers should not be forced to
choose between heating their homes in cold Chicago winters and
being able to afford other necessities like food.
Thank you again to the commission for this opportunity to speak.
Thank you so much for your comments.
Our next speaker is Christina
Tsai.
Hi, everyone. Let's lower this a little. Hi, everyone.
My name is Christine Chai. I'm a student at the University of Chicago studying
computational analysis and public policy, and I'm a customer of Peoples Gas
living in the 44th Ward. Um, I want to thank the committee for this
opportunity to comment and for listening with a sense of duty toward the
Chicagoans you are tasked to protect.
I'm also here to talk about affordability, and I'm here to ask that the proposed
rate hike is cut and greater oversight is applied to Peoples
Gas. As a policy student, one of the things I'm interested in is
affordability. I was recently surprised to learn that many Chicagoans are in
debt to Peoples Gas. About 141,000
households, which is one in six Peoples Gas customers, owe a
combined $64 million as of last December.
In Englewood, nearly half of all households are in debt to their gas
utility. My own bills jumped from $60 in the
fall to $120 in the winter. For many, this isn't just a
fluctuation in their budget, it's a critical situation that forces people
to choose between keeping their homes warm or putting food on the table.
Another 10 to $11 monthly increase only worsens the debt
crisis when bills are already unaffordable.
These increases stem from Peoples Gas choosing ineffective and
irresponsible ways to maintain infrastructure.
The pipe retirement program is completely mismanaged, so at the same time that
customers are paying for these infrastructure improvements, Peoples Gas is not
using this money to repair pipes in a prudent, targeted
manner. This passes all the risks and costs onto
customers. While Chicagoans struggle, Peoples Gas is raking in record
high profits every single year for the last five years, and they're poised to
pocket another $377 million this year.
This is a clear imbalance in the regulation of a natural
monopoly. Massive profits should not be sanctioned while
residents drown in debt. Please cut the rate hikes and ensure that safe
and affordable energy is available for all Chicagoans.
Thank you.
Thank you for your comments.
Our next speaker is Madeline
Brown.
Hi, my name is Madeline Brown, and I'm a Peoples Gas
customer on the South Side of Chicago.
I would like to thank the commission for the chance to speak to them
today. I... When deciding what I wanted to talk to you all
about, I kept coming back to this small problem that I have right now.
I had a cold last week, and that means I'm gonna have an asthmatic cough for about
the next month. I don't know why my lungs are like this, and
I never will. But what I do know is that I grew up in an old home with
radiators powered by a gas furnace and a gas stove, and there are
internationally recognized statistics that suggest that
13% of cases of childhood asthma and
wheeze are attributable to in-home gas use, especially when you
have poor ventilation, because we know that burning gas produces
harmful pollutants. In fact, those same
scientists who worked on this data suggest that over one in
five cases of childhood asthma in the state of Illinois would be
prevented by the elimination of gas use in homes.
So while you've heard from other speakers about how the Peoples Gas rate hike would
exploit the current dependence of Chicagoans on gas to keep their
homes warm, I ask you to additionally consider the
negative public health harms that this dependence, perpetuating
this dependence would have. There are reasons that Chicago has adopted
policy to move toward electrification.
I ask you not to continue to reinvest in further gas infrastructure
that would continue to keep households dependent on something that is harming our
children. Thank you.
Thank you for your comments. Our
next speaker is Emily
Chaklas.
Hello, and good morning. My name is Emily Chaklas, and I'm a community
organizer with the Illinois Sierra Club chapter.
I'm here as an environmentalist and as a concerned customer
of Peoples Gas. After breaking profit records year after year,
Peoples Gas is once again coming to the table proposing yet another
rate hike. Customers cannot afford these rate hikes just as the
environment cannot afford any more continued commitment to
dirty fuel. Already one in five Peoples Gas
customers are in debt to this utility.
Customers deserve cleaner and cheaper ways to heat their
homes. Peoples Gas put no effort into meaningfully
exploring non-pipeline alternatives and are moving forward with
rate hikes, shirking their responsibility to customers to consider
cleaner and cheaper ways to heat homes.
Peoples Gas' overinvestment in the status quo is being
passed on to customers, all while the rate hikes are being used
to decrease how this overall spending affects
themselves. Customers deserve the decency from Peoples
Gas that they do the bare minimum in exploring non-pipeline
alternatives and transparency i-in exploring
NPA projects. To stand with us means that you care
about the message it sends to continue investing in the gas
system and the impact that gas has on our health and our
climate. I urge you to stand with your community members and
constituents in opposition to Peoples Gas' rate hike,
as well as their continued investment in dirty energy.
Our people and our climate cannot afford it.
Thank you.
Thank you for your comments. Our next speaker is Maggie
Bowman.
Good morning. My name is Maggie Bowman.
I'm a resident of the Edgewater neighborhood of Chicago.
I'm a Peoples Gas r-
ratepayer, and I'm a property owner of a
two-flat. This proposed rate increase comes on
the heels of the Illinois Commerce Commission
already instructing People's Gas to scale down their pipe
line-- pipeline replacement program.
Further, we are in the midst of a multi-year future of gas
proceeding at the Illinois Commerce Commission, during which
there are all sorts of experts and stakeholders are coming together to carefully
consider the question of what should the future of gas be in our
energy systems here in the state of Illinois.
So at a moment when we're actively considering what our relationship will be
with gas, why are we subsidizing long-term investments in gas
infrastructure when renewable energy technology and
availability is growing rapidly?
Secondly, I'd like to speak from my pers- from the perspective
as a homeowner going on a, my own journey of
electrifying the two-flat that I live in.
I, um, have been l-learning for the last several
years, learning about exploring and slowly implementing the ways that
I can electrify my home. First of all, as someone with
asthma and lung disease, the s- emissions from a gas
stove were incredibly concerning to me, so I have
moved, uh, to an induction oven. Secondly, I had the
opportunity, with the help of federal tax incentives, to
replace my gas-powered hot water heater
with an electric heat pump hot water heater.
The next on my list, as soon as I have the opportunity, will be to
replace my heat dryer with an electric heat pump dryer.
I have radiators in my home, so the process of moving to an electric heat pump
to heat my home is going to take a little bit longer for me, but it is
absolutely on my list. When we look at the
fact that many consumers
are examining the homes they live in and thinking about how
to slowly move away from gas-powered
systems, why w- should we continue to be
investing in pipelines and technology
that really truly are of the last century?
Secondly, I just wanna speak to my own costs.
I... During the, the winter months, my
People's Gas bill is five hundred dollars and
up. It's my hugest financial
challenge heading into each winter.
And adding one cent to that, not to mention the ten
or eleven dollars that is likely to come from this rate hike, is a
burden I simply can't
stand.
I-- My final question then is, who is being
served by continued investments in the-
Thank you for your comments.
Our final speaker is Tanya
Sheth.
Good morning, and thank you for the committee.
Thank you to the committee for the opportunity to speak.
My name is Tanya Sheth, and I'm a People's Gas customer and Sierra Club
volunteer in Chicago on the Near West Side.
I'm here today to urge the commission to significantly reduce the proposed
People's Gas rate hike and to curb unnecessary spending on
fossil fuel infrastructure that is driving these increases.
My winter heating bills each year are around three hundred dollars per
month. Three hundred dollars just to keep my apartment
livable. All over the city, families are already struggling with
rising costs of rent, groceries, and
transportation. And in December of twenty twenty-five, nearly
seventeen percent of People's Gas customers were already in
debt to the utility. Now, People's Gas is asking for
another rate hike, which would increase average annual heating bills for
consumers while the company is projecting three hundred and seventy-seven
million dollars in annual profit.
So customers, once again, would be facing increased costs just to
fund corporate profits. At a time when delivery rates have
already increased seventy-one percent since twenty twenty-three, this is
simply unaffordable. Consumers should not be responsible for
bankrolling unnecessary fossil fuel expansion to guarantee
corporate returns. Chicagoans deserve affordable energy,
real safety improvements, and a path towards a cleaner
future. I ask the commission to significantly reduce this rate
hike, curb unnecessary spending, and refocus on a
truly affordability-first transition to clean energy.
Thank you again for your time and consideration.
Thank
you.
I wanna thank all of our speakers and folks attending today, uh, in
person and virtually. And, and just as a note, I, I
know that, um, some of the prepared testimony is also
for the commission, uh, but I just wanna clarify, as the
Committee on Environmental Protection and Energy for the City of Chicago, we
do not have decision-making power, um, on
whether a rate increase is, is approved or not.
However, we're here today because as members of the city
council, we represent constituents in the City of Chicago, and,
uh, we're also ratepayers, and we care
about what's happening with our utilities.
Um, you know, it's a unique space, whether we're dealing with Commonwealth Edison
or People's Gas, um, our utilities are private utilities, but
they have such an impact on the public.
Um, so just as a note, remembering that you're older people, we don't get a
say, um, uh, any more than you do, but your
voice, your experience, and your opinions are very important.
And it is, um... We're grateful for you to come here and share those with
us, just as we're grateful for, um, our, all of our speakers and our
guests here today.Um, so the only agenda
item before the committee today is the subject matter hearing on the
Peoples Gas Pipe Retirement Program, or PRP.
Um,
and before we get to that, I was just reminded we ha- do have to actually approve
our minutes from the last meeting. So thank you, Leslie.
Um, so public comment is concluded. We do have, uh...
the committee did receive six written public comments, um, that was sent out to
our committee members via email. And, um, uh, with our
Rule 45 report from our February 2026, uh, committee,
we do have that. And could I get a motion to approve the Rule 45
report? Alderperson Lawson so moves.
All those in favor say aye. In the opinion of the chair, the ayes have
it. So moving on to our subject matter hearing.
In January of this year, Peoples Gas filed a request for a
$202 million rate increase with the ICC, or Illinois Commerce
Commission, starting in 2027. According to
their filing, this would result in approximately, uh, $11 more
per month for residential customers.
The rate request comes on the heels of a previously approved $306
million rate increase, which was $96 million less than Peoples
Gas' $402 million rate increase at the time of their
request. Um, this has already been started to reflect
on the, uh, bills of ratepayers. In its filing, Peoples
Gas provided two categories to further detail their
reasoning for the request. Uh, the first is infrastructure
costs related to the Pipe Retirement Program, or
PRP, which requires Peoples Gas to retire at-risk aging
cast and ductile iron pipes by the end of
2034. The second stated reason is for increased costs
related to debt and common equity for Peoples Gas over the levels
previously approved in 2015.
In February 2025, the ICC issued a ruling on the
PRP after having paused it in November 2023
due to mismanagement. In its 2025 ruling, the
ICC permitted Peoples Gas to resume work within a limited
scope. Instead of replacing its entire gas pipe system as
Peoples Gas' initial request would have permitted, the ICC ruled
that Peoples Gas is only to retire the at-risk gas pipes that
present an acute safety risk by the end of tw-
2034. The February 2025 ruling meant that
Peoples Gas could no longer combine at-risk pipe replacement with a broader
msys- broader system conversion, as it had been doing previously
before the pause of the program in 2023.
At the time of this ruling, this amounted to approximately 1,100
miles of pipes in need of retirement.
The ICC has also appointed a safety monitor to PRP to
create additional oversight and accountability.
That second stated reason for the rate hike request is the company is paying more
towards debt service than before, which is affecting its approved equity
levels. In its ruling, Peoples Gas states that at the current approved
utility rate, it would earn a return on equity of
5.49% in 2027, compared to the
authorized 9.38% equity return in its
2024 rate case. Ahead of today's
hearing, we did ask Peoples Gas to provide committee members with specific
responses to questions provided by our team.
Members have been sent those responses via email.
We also have physical copies of those responses, as well as Illinois PIRG's
testimony, um, and a pie chart they shared that breaks down the allocation
of the rate increase for anyone who would like a copy.
Joining us today are Maria Bocanegra and Lenton Mc- Leighton McCoy from Peoples
Gas. We also have, uh, Sean, uh, Goudridge from
Local 18007, which is the in-house union for Peoples
Gas. And to provide expertise, uh, insight into the
consumer impact, we have, um, Abe Scarr from Illinois
PIRG. Sarah Moskowitz from the Citizens, uh, Citizens Utility
Board was supposed to join us this morning, but due to illness, unfortunately, was
not able to make it. Abe has connected with her team and will try
to answer questions from the committee about rate increases on the behalf of CUB.
We'll also be sure to direct any questions that, uh, anyone's unable to
answer through the chair, um, and specifically for CUB as
well, um, for follow-up. Um, we've aimed to
keep a balanced panel to really discuss the pending rate hike request
and the Pipe Retirement Program and how this will affect our
constituents in the short and the long term.
Um, with that, I'm gonna turn it over to Maria Bocanegra and to
Leighton McCoy from Peoples Gas to begin on testimony.
Um, for members of the committee, we will have, um,
all members of our panel give their testimony, and then we will
open it up to questions. Um, so, um,
Maria, I'm gonna turn it over to you.
Can you hear me?
Yes.
Perfect.
All right. Um, good afternoon, uh, Chair Hadden, members of the
committee. Uh, my name is Maria Bocanegra, spelled
M-A-R-I-A
B-O-C-A-N-E-G-R-A. I'm the
president of Peoples Gas and North Shore Gas.
We understood that today's winter preparedness hearing was to last a few
hours, but after seeing the published agenda, I do wanna apologize
in advance. We are only available until 2:00 PM this afternoon, but we remain
committed to having a productive dialogue.
This is the second time that I've had the privilege to be here, and since
then, I'm proud to tell you that under my leadership, we are
more committed than ever
to our relationship with the city of Chicago, our residents, our
customers, constituents, and working with stakeholders in
every sense of the word. I wanna talk about how this is
showing up in what we do. I
think where I would start is I wanna share a little
story about what I feel has been the most impactful change early
on.To do that, I want to start with some personal
background. My mother was a single mother, and she never finished
college. She lost her job because she didn't have the privilege
of obtaining that college degree.
This, like many of my personal experiences, influence how I
choose to lead today. I share that because this shaped what I
believed has been the most impactful thing I did in year
one. In listening to our employees, they wanted
to move up but didn't have that college degree.
I saw my mother in them plainly. So one of the
first things I did early on was to remove workforce
barriers for our employees by eliminating college degree requirements
across several multiple job titles.
For year two, we are exploring partnerships with local
universities and working with our human resource teams to find
out about what our employees want and what they
need. In addition to in-- addressing
employee feedback, I have focused my leadership on
expanding community involvement.
We have expanded our partnership with Exchange Chicago in hiring
for the Pipe Retirement Program. We are in the process of
expanding our Bright Futures U program with Chicago Public Schools
by adding even more schools and even ro-- more program
offerings. We are also innovating the way that we
partner with public agencies, leveraging corporate
goodwill for progress. As one
example, we are excited to be entering into a
partnership with the Cook County Land Bank in order to
effectuate efficient, safe, reliable service to the
properties that they own while helping to promote economic
development in much needed areas.
In addition, we are looking forward to partnering with the city clerk's office and
joining them at their mobile city halls.
We heard our customers and our constituents feedback loud and
clear, and we are doing more to make sure that we are able to
outreach in our communities directly to show them, uh,
areas of savings, uh, with financial assistance programs and things like
energy efficiency. I also wanna point out
that we took the initiative and initiated a stake-- a series of
stakeholder round tables with everyone sitting at this
table. Let us-- and, and that led us to make some progress
in implementing non-pipe alternatives, which you heard, uh, this morning
a little bit through the comments.
NPAs will become a programmatic focus of the analysis that we
do in relation to the Pipe Retirement Program.
We have also supported Commissioner Tovar's office and the Chicago
Housing Authority by signing a letter of support to explore a
geothermal pilot right in our own jurisdiction.
At my direction, we have created surveys as part of our
annual, biannual Pipe Retirement Program,
uh, forums that we are required to have, and we've sent them to
every stakeholder and every intervener, including CUB and
PURG. We were seeking proactive
feedback before, during, and after those forums in order to help shape
and inform those discussions. The reality is, is
that we are the bedrock of Chicago.
We care about our communities. Peoples Gas employs
nearly fifteen hundred people, many of whom live here right in the
city. For over a hundred and seventy-five years, we have
provided safe and reliable energy to homes and
businesses year-round.
I could go into the numerous groups and ways that we are committed to our
communities, but I just wanna highlight this.
In twenty twenty-five alone, Peoples Gas contributed three point five
million dollars across two hundred and forty-two
Chicago area
nonprofits. On to
the topic of winter preparedness.
We understand that this hearing began as a winter preparedness
discussion, much like Hamed's, and we certainly welcome that.
The reality is this, extreme weather events are not theoretical.
During the January twenty twenty-six cold spell, conditions
resulted in the largest natural gas withdrawal from
storage ever recorded in US history.
On the coldest day in January, Peoples Gas delivered enough
energy to meet the demand equivalent to twenty-six point three
gigawatts of electric generation.
Just to put that into perspective, that would be the same as powering
more than twenty million homes all at once on one peak
day. It would be also the same as providing electricity
to power every home in Chicago for more than one
month. During that
January twenty twenty-six cold spell, on a national scale,
conditions did in fact result, as I said, in the largest gas
withdrawal ever recorded in US history.
For us at Peoples Gas, the twenty twenty-five/twenty twenty-six
portfolio includes the following: thirteen percent
firm base load supply, five percent firm call
options for flexibility, sixty-six percent
storage, uh, storage withdrawals as the dominant reliability
lever, and sixteen percent liquefied natural gas as part
of peak and reliability planning.
That mix matters. Storage really is the centerpiece
because it allows us to buy gas when it is cheaper and more
available, and then withdraw it when peak demands, as it did in
January, and the market becomes stressed.
This lowers costs and improves reliability exactly when
Chicagoans need it most.
Chicago operates in one of the oldest natural gas delivery
systems in the country, and independent analysis have
shown that eighty-three percent of remaining cast and ductile iron pipes
had less than fifteen years of life remaining, and that was six years
ago. This is a public safety
issue.This brings me to the work that we are
doing regarding the pipe retirement program across
Chicago's energy system.
This work is not optional. The ICC has directed People's
Gas to retire the riskiest aging pipe by
January first, twenty thirty-five.
This is an accelerated timeline. This is not a company
decision. It is a non-discretionary regulatory
mandate. The PRP, which Leighton will
discuss, addresses risk to support ongoing safety and
reliability in Chicago's heating system.
Turning to the rate case request that we have filed with our state
regulators. As a result of this accelerated
mandate, we are required by law to present our cost to do three
things. One, retire the pipe.
Two, provide service to our customers.
Three, most importantly, ensure that that service addresses the
safety and reliability of the system.
Our rate filing with state regulators is fundamentally a safety and
reliability filing driven by mandated infrastructure work and
real cost pressures. I want to be candid
in sharing that because this is a rate review in a litigated
proceeding, rate review related questions will be answered by
our regulatory counsel, who is present here today.
If he is unable to address that, we will certainly go through the chair's office to
get those questions answered. We are still here to assist the committee in
any way we can on that matter.
So in conclusion, I wanna end on this commitment.
I love this city. I care about this city.
People's Gas cares about this city, its people, and its
progress. As I sit here today, my commitment to the
city of Chicago is and remains service, reliability,
transparency, and above all else, safety.
Thank you.
Good afternoon, everyone. Uh, my name is Leighton McCoy.
I'm vice president of the pipe-- of the Pipe Retirement Program here at People's
Gas. Um, before I get-- provide some comments about the
program-
Mr. McCoy, could you, uh, uh, just, uh, go ahead and lower that mic a little closer
to you?
Okay.
We can hear you, but it's also for the recording.
No, thank you. Uh, before I share some comments regarding the program, I wanna
share a little bit of my background.
Um, actually, today is a milestone day for me.
I joined the company just forty days ago.
Um, while I'm new to People's Gas, um, I'm not new to
pipeline infrastructure work. I've been blessed.
I've spent more than thirty years in engineering and energy sector.
I just moved here from Cleveland, Ohio, where I served in a capacity-- in a
compliance capacity and pipeline safety capacity.
Um, also early in my career, much of that time was spent leading large
pipeline replacement programs, modernization
programs, and regulated infrastructure programs.
So I think that perspective is what leads me to be so
confident that I can contribute and add value to this
project. Um, I've led transmission projects, distribution replacement
projects in multiple states. Um,
I have seen firsthand what it takes to execute a
safety-driven infrastructure program similar to
PRP. Um, while this opportunity
arose to lead this project in Chicago, I accepted it
because it's a generational infrastructure project.
Um, an opportunity to work with one of the oldest urban
gas systems in the country. Um, retiring almost eleven--
uh, a thousand miles of aging i-iron pipeline
definitely, um, was a challenge that I wanted to
undertake. Uh, from my past, I had some experience with bare steel
pipe replacement programs, so definitely I saw a correlation
in taking on this challenge. Um, I relocated
here to take on this responsibility, but I, I, I did want to share my
family remains in Ohio,
um, while my children finish school.
I, I share that simply not for sympathy,
but I did not take this job casually.
Um, as I mentioned, my previous role in pipeline safety and compliance,
I know the importance of safety and reliability and
l- how critical this is for long-term resilience with
Chicago's energy system.
I think another advantage I have, uh, set a fresh s-
fresh set of pair-- I, I'm saying this wrong.
I came here with a fresh set of eyes.
Um, it's an advantage I think we all like to have when you can come
in and ask so many questions
under the premise that you want to add value.
But also, I think sometimes when you have seen something for so
long, it takes that fresh set of eyes to identify some
opportunities for improvement. Um, one of my immediate priorities I've
seen in ensuring this program is ensuring it's implemented
with discipline. I think from my experience with our pipeline replacement programs
in other states, that's been the key.
Um, discipline, consistent responsiveness, and
accountability. Um, the ICC has mandated that the
remaining ten, twenty miles of aging pipe be
retired. Um, and independent
assessments determined
that a significant portion of our system was reaching near end of
useful life, a, a critical data point.
I mean, some areas, less than nine years of remaining life is
estimated. That's not reality. Um, that's not a preference.
That's not politics. It's what drives this work.
Uh, modernizing the system improves safety, it reduces leak
risk, and enhances reliability. Um, at the same time, we
recognize that this work is-- it represents a significant
investment, and it must be executed responsibly
and transparently.I understand there are fair questions about cost,
um, but my commitment as VP is straightforward.
We will execute the work safely, transparently, and
with accountability.
I'd like to address, and I'm, I'm happy I'm sitting beside Sean.
I wanna address our ongoing discussions with Gas Workers
Local eighteen double oh seven. Um, let me say this
very clearly. I have profound respect for union
labor. I would not be blessed for this-- in this type of
role without the guidance and mentorship I
received when I joined the energy sector from union workers.
Throughout my career, I've worked along-beside the
trades. Union craft labor is the
backbone of safe construction programs.
Our short-term and long-term success of this program
will definitely require the presence of eighteen double oh seven.
They are critical to our success. They are
skilled professionals who understand the system and are committed to
safety. We are committed to growing the local
eighteen double oh seven workforce. I'm gonna say that again.
We are committed to growing the local eighteen
double oh seven workforce. Once funding decisions are
finalized, our intention is to continue hiring additional eighteen
double oh seven members to support this multiyear
effort.
With that, um, let me, let me close with this statement.
Um,
this is safety-driven work, and I, I'll put back on my compliance
hat. Um, this is not a money grab. This
is a
infrastructure work that has been deemed necessary not only by
the ICC but also by PHMSA. Um, from my
pipeline s-safety hat, my responsibility, our
responsibility, our commitment is to ensure this is executed with
discipline, transparency, and
accountability, and respect for our communities, but
also our workforce. Thank you.
Thank you so much. Um,
now we're gonna hear from Sean Goraj from Local eighteen double oh
seven. He teed you up, Sean. Oh, and Leighton,
Leighton. OH.
IO.
All right.
He, he surprised the hell out of me.
Um,
so
good afternoon, everybody. Uh, Chair Hadden, distinguished alders, thank you
for allowing me to testify here today because, as we know, and you
said, we are the only in-house union for People's
Gas. Um, before I get into my testimony, I would like to start
off by saying let's keep our troops in the Middle East and around the
globe in our hearts. Uh, this weighs heavy on Local eighteen
double oh seven because our strong veteran population and to
potential to be called up to active duty.
Let's keep positive thoughts and prayers going out to all the men and women who
proudly serve this country.
My name is Sean Goraj. I'm the business manager, Utility Workers Union America Gas
Workers Local eighteen double oh seven.
I represent approximately one thousand hourly employees of People's Gas
who are responsible for safely delivering natural gas and staffing the customer
care center. Our membership is eighty-two percent
diverse. Sixty percent are veterans.
Many live in the city
and are also customers of People's Gas.
And ninety-five percent live in the Chicagoland area.
We reflect the diversity of PGL's customer base, and we are on
the job twenty-four/seven in every one of the two hundred and thirty-four
square miles of City of Chicago.
As a crew leader in the distribution department with more than thirty years of
experience, I'm here to talk about the restart of People's Gas Pipe
Retirement Program and its impact on labor.
Throughout my career, I have seen firsthand the poor condition of the
underground pipes. That is why we
wholeheartedly support the restart of
PRP. For over a decade, People's Gas,
through the work of my members, have been replacing that pipe at an
accelerated pace. However, as you know, that work was
paused by the ICC. The restart of the accelerated
pipe replacement will, number one, positively affect
safety and serve as an opportunity for People's Gas to
increase hiring to accomplish this
work. Natural gas is a safe,
clean, environmentally friendly, low energy cost source
when it is controlled. When it's not, gas is
dangerous. It's dangerous for my members to have to
work on pipe that is leaking, decaying, and
crumbling. It's dangerous for our customers when leaks
occur underground and migrate to other infrastructures.
Restarting accelerated replacement will reduce these potentially
unsafe conditions sooner.
With regard to hiring, the pause resulted in the company reducing the number of
eighteen double oh seven new hires because there was less work.
They also pulled back on internal promotions for seasonal employees
moving to regular positions. The restart now is
an opportunity for People's Gas to increase hiring and promotions to
meet the workload demands of PRP and provide
careers for local job seekers.
The mandate the company received from the ICC to replace eleven hundred miles--
remaining miles of cast and ductile iron pipe by the end of twenty
thirty-four will require significantly more resources
to be assigned to this project by twenty twenty-eight.
The company has stated that twenty twenty-six and twenty-seven will be the
ramp-up years
to get the needed resources in place to dramatically increase the amount
of main retired in twenty twenty-eight through twenty
thirty-four.Our view is that the ramp-up period
provides a window to find, hire,
qualify, and have an on-the-job training component eighteen
double-oh-seven members to perform the customer-facing work and
retirement of main tasks we have-- which we have been
performing exclusively for decades.
I wanna provide some additional color on how to-- how work under this project has
been performed for the past fifteen years or
so. Most of the underground installation of
gas-carrying main and services has been performed by
contractors using pipefitters, operating
engineers, laborers, and teamsters under a project
labor agreement. Local eighteen double-oh seven has been
exclusively performing the meter set and pipe retirement work.
The trades in eighteen double-oh seven have, have worked well together on
accomplishing this challenging work for more than a decade, and
we value our trade union partners.
To be clear, the ICC shutdown was not the fault
of local eighteen double-oh seven pipefitters, laborers,
operating engineers, or teamsters.
It purely falls on the shoulders of People's Gas.
Because of the dramatic ramp-up in twenty twenty-eight workload
over the annual workload amounts produced over the last ten years,
more resources than ever will be required.
The trades will be challenged to supply enough workers and will likely
employ some number of travelers from out of the area or out of the
state. Similarly, eighteen double res-- uh, the-- I'm
sorry. Similarly, eighteen double-oh seven's resources will need to be
increased. We have been in s-discussions with the company since the
beginning of twenty twenty-five about this, and discussions
continue. However, we have been dismayed and
disappointed in the threat by the company to employ travelers to
perform our work. We do not believe using travelers to
supplement our work makes sense for a few reasons.
First, that approach dismisses the opportunity to provide
jobs, actually careers, for many Chicagoland
residents. Second, why should the economic
benefits of employment leave the area?
Third, and very importantly, travel costs for trade union
workers are significantly higher and will increase the costs of these
projects. Trade union wage scales are
significantly higher than eighteen double-oh seven seven wages to begin
with. Benefit costs are higher, especially since our newer
members do not even have a pension benefit.
The per diems travel and lodging for travel trade union members will
unnecessarily add to project costs.
We understand that some traveler trade union members will be needed to perform the
main and service work because of the ramp-up and the work to meet the ICC
mandate. When the project was paused, many of those workers went on to
other work.
But why should the higher cost be tolerated when there is a viable lower
cost option to use local eighteen double-oh seven
resources? I'd like to expound on the hiring opportunities for
local residents. Specifically, there are three avenues we
believe should be macan-- maximized.
First, eighteen double-oh seven in partnership with the City Colleges of
Chicago
and the UWUA Training Trust already run a training
placement program for military veterans.
The Utility, Utility Military Assistance Program has produced
hundreds of employees for People's Gas and should be ramped up to meet
those additional hiring needs. This program has also helped
increase the number of females in non-traditional career
roles. We have gladly helped other UWUA
locals and their owner utilities replicate this program.
As a matter of fact, UMAP has been a model across this
country. As I mentioned in my earlier remarks, we are
talking to the company about adding cohorts, but to date, no firm
commitments to ramp up this program have been made.
A second avenue is the Chicago Public Schools.
The CPS program has provided an opportunity for CPS students
interested in the utility career to learn and train on gas company
work, and upon graduation, have a job offer waiting for
them. This program should be increased and
maximized. The third opportunity is to continue to
utilize our entry-level classifications, which are open
to the general population, not just veterans or CPS students like the
first two.
We have offered the company flexibility and an opportunity to increase job
responsibilities of entry-level workers to add to the efficiencies
of this project. The all-in pay and benefit costs of all
three, uh, hiring opportunities are sif-significantly more
economical to get the meter work and the pipe retirement
activities accomplished. The costs of this project are already
under fire. As the company continues to file annual rate cases to
recoup their investment in main repla-replacement, we believe we
offer a viable economic labor option, one that provides career
opportunities for local constituents and significant
benefits for the local economy. Thank you for the opportunity to express
my views of my thousand-member strong
local.
Thank you, Sean. Uh, next we will hear from Abe
Scarr.
Good afternoon.
Uh, Chairperson Hadden, Vice Chairperson Knudson, and honorable members of the
committee, uh, thank you for the opportunity to testify today. My name's Abe Scarr.
I'm the director of Illinois PIRG.
Illinois PIRG is an advocate for consumers advancing solutions to
problems that affect our health, safety, and well-being.
Uh, I appreciate the ongoing interest of, uh, Chairperson Hadden and the
committee in these issues that have profound impacts on
Chicagoans. I also wanna thank, uh, Maria Brocnegra.
She said earlier she has done, holded stakeholder meetings, uh, with
myself and other colleagues, and we appreciate that outreach as well as, uh, we've
had good conversations with Sean and appreciate the, uh, dialogue
we've been able to have with, uh, other, uh, stakeholders here, even if
we don't always agree, as you'll hear.
Um-As you folks heard earlier, Sarah Moskowitz from the Citizens
Utility Board was supposed to be up here as well, uh, but is ill.
And so I'm amending my remarks slightly just to cover some of the ground,
uh, she would have covered, and I'll start with that and then go back to my
prepared remarks. Um, so I think it's important for folks to understand
the context in which this rate hike is coming for, uh, People's
Gas customers. Uh, rates have already effectively
doubled since two thousand and eleven, a four hundred and ninety-nine million
dollar increase. Um, this increase, if approved in
full, would add an average hundred and twenty-seven
dollars annually to bills. Um, some of the
factors, uh, driving the rate increase, uh,
is the pipe retirement program and other capital spending.
So the pipe retirement program alone is contributing, uh, thirty-nine
million to the overall two hundred and two million dollar proposed rate hike.
That's nineteen percent. Another nineteen percent is, uh, just for
increase in, uh, profit alone. Um,
and that's one of the things that I'm sure Sarah would have pro-- uh, pointed out,
uh, one of the, uh, places where we will be fighting in the rate
hike, the proposed ten point one percent profit rate, which we believe is
excessive. Um, People's Gas has already, uh,
had, uh, record profits in seven out of the nine last
years. And when they're talking to Wall Street analysts on their earnings calls or
reporting to the SEC, they do, uh, credit the pipe retirement
program as a main driver of, uh, their
profits. Um, this is having an impact on
Chicagoans. Uh, as of January, the last, uh, month we have
data for, a hundred and forty-six thousand customers in People's Gas
territory were more than thirty days behind on their bills, uh, for a total
of over seventy-one million dollars in debt.
And if you look at certain neighborhoods, uh, you see consistently over
thirty percent of customers in, uh, around a doz-- uh,
around ten neighborhoods, uh, that are consistently behind on their
bills. So I, um, I did
submit more detailed written testimony and will work to keep, uh, my
comments relatively brief. Uh, I, uh, I will be
addressing with the rest of my testimony the Pipe Retirement Program, or PRP,
which has been the primary driver of People's Gas rate hikes, and I'll make three
points. Uh, first, despite an order from the Illinois
Commerce Commission to implement reforms, the PRP is more of a
continuation than a break from People's Gas past
efforts. Second, this replacement-first approach
costs too much, won't work, and threatens to lock
Chicagoans into paying for unnecessary polluting fossil fuel
infrastructure through the end of the century.
And finally, uh, as an alternative, a safety-first approach could cost
less, better achieve public safety goals, and facilitate rather
than frustrate Chicago's transition to cleaner, safer energy to heat our
homes.
So, uh, for my first point that the PRP is more of the same.
In, uh, November twenty twenty-three, as we've heard today, the ICC paused
People's Gas Pipe Replacement Program and opened an investigation.
That investigation concluded, uh, just one year ago in February twenty
twenty-five. There's a lot in the order, uh, but I wanna call your attention
to, uh, broad reforms the commission directed People's Gas to
make. First, the ICC ordered People's Gas to retire
its remaining pipes, not necessarily to replace them.
This distinction is important. Retirement means to take out of service, and
replacement is just one of dif-- uh, several different ways you could
retire a pipe by replacing it with a new pipe.
Uh, in stressing retirement, the ICC is making clear that People's Gas should not
default to wholesale pipe replacement, but instead consider
multiple strategies, uh, to retire pipes and mitigate
risk. Second, the commission repeatedly admonished
People's Gas to prioritize iron pipe retirement in a rigorous risk-ranked
manner and rejected the utility's historic practice of systematically
combining risk reduction work with so-called system modernization work,
which primarily means converting, uh, from low to medium
pressure. Now, the utility claims that it's
following these directives, but, uh, I believe evidence suggests that the PRP
will continue to, A, default to replacement, and B, implement
replacement with medium pressure conversion.
And rather than a reformed program, the PRP appears to be more of the
same. And I include more detailed discussion of this evidence in my written
testimony and be happy to discuss it with the committee.
The second point, the replacement, uh, first approach costs too much, won't
work, and will lock Chicago into polluting fossil fuel
infrastructure. Replacement first costs too much.
In recent years, People's Gas has spent an average of two hundred and sixty-five
million dollars per year on pipe retirement.
Now it's planning to spend, uh, more than twice that amount, five hundred and
thirty-five million dollars each year, every year from twenty twenty-eight through
twenty thirty-four.
If it does, our gas bills will skyrocket even more than it-- they have
in recent years. Uh, that massive
increase in rates could also come on top of consistently higher gas commodity
prices. We're already experiencing higher gas prices.
The United States is now the largest, the world's largest exporter of methane
gas, which a-- on its own will drive up prices.
It also makes us more vulnerable to dynamics in the world gas
market, uh, like pri-price shocks from
war. And finally, a replacement for... Oh, sorry.
Second, uh, pipe replacement won't, uh, work.
Based on its projected retirement over the next two years, People's Gas will need
to retire more than a hundred and thirty-three miles of pipe per
year between twenty twenty-eight and twenty thirty-four to meet the ICC's
deadline. Its recent rate of retirement was less than half that, fifty-nine
miles per year. Yet even with this, uh, lower,
uh, these lower goals, People's Gas fell short of its
retirement goals for twenty-three consecutive quarters.
It has not shown that it can hit its pr-- uh, retirement targe-targets, and there's
no reason to believe it can hit targets twice as
high.And finally, in this point, uh, replacement will lock
Chicagoans into polluting fossil fuel infrastructure.
When the utility installs a new gas pipe, it recoups its costs from customers over
the expected life of the pipe, and that could be anywhere from forty to seventy
years. But by installing more than a thousand miles of new gas
pipes, Peoples Gas would be committing Chicagoans to pay for them until close to
the end of the century, past when we should transition to safer, cleaner
energy to heat our homes.
A, a safety first approach would be more effective and less
expensive. In order to give customers the greatest safety bang
for the buck, uh, Peoples Gas needs a valid, transparent risk
methodology. Uh, to date, Peoples Gas has not been transparent
regarding its newly adopted risk methodology provided by the Jana
Corporation. Uh, this is important because in the twenty
twenty-four ICC investigation, experts hired by
Illinois PIRG documented mathematical errors in Peoples Gas' previous
risk assessment methodology, and this is one reason why we believe we've
been spending so much money, or Peoples Gas has been spending so much money on
this, uh, program without seeing the reductions in safety risk that we should
be getting. Despite our ongoing efforts, uh, the utility has not
answered fundamental questions posed by our excerpts-- experts.
The ICC has made clear it expects transparency, and we will continue to pursue it
in the rate case. There are viable alternatives to replacement that
cost less, can take less time, and improve safety just as
much, if not more. One example that you heard from, uh, Saad
Sadiq from EOPC earlier is c-cured in place lining.
This refurbishes pipes with internal linings and eliminates leaks
and can extend the life of pipelines for over a century, and
I'd, I encourage folks to read Mr. Sadiq's written testimony for more
detail on that, uh, promising technology.
Uh, targeted electrification is another potential alternative, uh, to
replacement. Uh, in the NPA workshop, which the commission ordered
as part of the investigation, Illinois PIRG presented an illustrative
NPA analysis of options for a neighborhood in Irving Woods.
This analysis showed that, uh, maintaining and, uh, repairing existing gas
infrastructure while steadily electrifying would be among the least
cost options.
So again, in summary, despite ICC directions, uh, direction to
reform, Peoples Gas' approach to pipe retirement is more of a continuation than a
break from past practices. This replacement first approach is too
expensive, won't work, and threatens to lock Chicago into unnecessary fossil
fuel infrastructure. A safety first approach could cost less
while making us safer and facilitate rather than frustrate the transition to
safer, cleaner energy to heat our homes.
Again, uh, thank you for the opportunity to testify today, and I encourage the
committee and members of the committee to continue monitoring this rate hike, uh,
and the pipe retirement program and to communicate with your constituents and the
ICC on these matters. And I'll be happy to answer questions. Thank you.
Thank you. Thank you to all of our
panelists.
Um, wanna recognize, uh, non-member Alderman Sposato.
Thanks for joining us. Um, yeah, thank you
all. And I, I wanna open us up to
questions. Um, as we are looking at time, it's twelve
forty-five. I think we've got enough time for questions, but, um,
I'll ask our panelists to do your best for concise
responses. Um, your best. I know we got big
technical, complex, relationship based things,
um, but I'll hang out and talk with you more afterwards if you really
want to make more time with us. All right, I see,
um, Alder Lawson.
Thank you, uh, Chair, and I, uh, I appreciate...
I just have two quick questions and I, and I have a conflict, so won't be able to
stay for everything. But, um, to our,
our, uh, our representative, uh, Mr.
Goldridge, you mentioned that there's a labor shortage
anticipated
between what is in-house and the need to require trav-- uh, traveling
labor. W-can you qua-quantify that for us?
There are two hundred in-house gas workers now, and you need three hundred
to do the job, or what those numbers actually look like.
So at the, at the height of the project, which I believe was in twenty
eighteen, there was around thirteen hundred gas workers.
Okay.
Um, as of
February tenth, we had nine eighty-two.
So the work, the workload changed a little bit,
so they stopped hiring. Um, attrition
is a big one. We're at about a seven point eight percent attrition
rate, year in, year out. Um, we have an aged
workforce, where they are on a pension
system, and there's a chance that if the interest rates change, we could
u- we could lose a majority of them.
So, you know, it doesn't-- you don't become a gas man or
woman overnight. So our contention is, you know,
start hiring, get these guys and gals trained up so that when the
attrition does hit or people go on to other careers, they're
ready to step in those seats.
Great. Great. Thank you. Um,
but just the other question I had in, in, uh, response to some of the commentary
was, right, the mandate is to retire, not replace.
So maybe the question is for Peoples, is, uh, are we looking at a
project that is a hundred percent replacement, or is there any relining or any
other work, um, that's contemplated in this?
And if you have percentages of that, that's helpful.
I can answer that. Um,
it is not a full replacement program.
The focus is retirement. Um, part of the changes that we've
made, every project, um, is initiated with an
analysis of alternative, um, options,
whether it's to replace, whether it's, um, double loaded
on both sides of the, the roadway, um,
need. So I think that's some of the concerns that were expressed in the
past. Um, alternative
Options, non-pipe alternatives, that's part of our
process now for all projects, all PRP
projects.
Okay. So going forward then, do you have an estimate of what would
be a replacement versus a relining or a sta- you know, something
else? What percentage are you look- you anticipate would be a full
replacement compared to something else?
Let me answer it in this fashion. We do not have a full replacement that does
not also coincide with some retirement.
Um, that's where our
risk ranking of pipeline systems will determine which
pipe is the priority, but there is not a scenario where we're only
replacing pipe. We have corresponding retirement that also takes
place.
Great. I mean, I think from a cost savings measure, right, we talk about this with
water, right, and sewer and other things to reline.
So, um, uh, those are the two questions I have.
I'll continue to listen and, and thank you for the hearing.
Thank you. Uh, Alder
Ramirez.
Hello? Okay, great. Good afternoon.
Um, so, this question is for Peoples
Gas. Um, is this a rebrand from other programs that you guys have done in the
past,
the PRP in specific?
Thank you, um, Alder Ramirez. Um, let me start by saying that the
PRP has nothing to do with the rebrand.
It is everything to do with safety, um, as mandated by the
ICC. I think I might try to answer it this way.
If you're asking what's different, I will start by saying leadership,
myself and Leighton are new. Um, I have a background in
public service. I was in government for nearly 10 years.
I once had the privilege of regulating utilities.
Um, I think I can confidently say I know what it takes
to exercise oversight, and I think I have a good sense of what's
expected. Um, in terms of just what's different
programmatically, um, I, I think you heard Abe and others talk a little bit
about some of the nuances. I would say this program is very different
than what we're doing. Uh, number one, we, um, will be
leaving the meters inside. Um, that spoke a little bit to
the modernization efforts or the, um, apparent,
um, you know, thought that prior iterations of the program did not
prioritize safety and risk reduction.
Uh, this program centers risk reduction first and foremost.
We are focused on mains. Uh, Leighton alluded a little bit to some of the
alternative analysis, uh, currently which does include a do nothing
approach, which we do nothing to address the risk.
Uh, we can continue throwing O&M dollars at it, um, and that
is an option that we analyze across every project.
In addition, uh, he mentioned the liners, and we are in the
process of implementing an NPA analysis which would address things like
geothermal electrification. It's not ready yet, but I would say that's pretty
different than prior iterations.
Okay. Yeah, I- I think you're addressing some of the questions that I do
have about, I guess, the operations that you guys maybe
have learned from or just financial lessons that you guys have learned from from
previous programs. Can you kind of speak to maybe a little bit of
that?
I, I guess what I would an- the way I would answer that is, um,
you know,
one thing that we are doing is, um, we are really focused on
cost effectiveness. Um, that's always been a cornerstone of what we do.
We're very conscious of, uh, bill impacts and whatnot.
Um, the bottom line is none of this will be
approved until it is approved by the ICC, um, that is subject
to pretty robust regulatory oversight and review.
Um, in addition, we have a safety monitor that I believe will be able to
assess, um, our efforts at implementing that directive
and the construction, uh, which will include, you know, the cost
associated with that. So I hope that answers your question.
Okay. Yeah. I guess for the ICC, what is the
timeline moving forward or how can we stay up to date
on...
So, uh, the current rate review that's pending, um, it is, uh,
scheduled to have a decision somewhere in around November,
um, that is subject to-
November of this year?
Yes.
Okay.
Correct.
And let me
see. And I guess if
you can just sort of reiterate, I think this is on a lot of folks' mind
of assistant programs that, um, folks listening and
assistant programs that we can make sure that we're taking back to our wards.
Do you wanna highlight some of those?
Sure. Thank you. Um, yeah, I'm happy to speak about that.
Um, you know, first and foremost, um, we offer our low income discount
rate. As of the end of twenty twenty-four, we were able to offer, uh, nearly
ninety-five million dollars to approximately a hundred and seven thousand
households. That program is, uh, remains in place
today. Uh, we also have budget billing options.
Um, we have repayment options that are available.
Uh, we also have a program called Share the Warmth that is available, and of
course, we partner, um, with, uh, local agencies in, in order to
assist folks, um, in learning more about things like
LIHEAP.
Awesome. Okay. I yield my time. Thank you.
Reclaiming your time. All right, Alder Ramirez.
Uh, Alder Tavares.
Good afternoon. Good afternoon. Uh, thank you for your
testimony, all four of you. My question is for
Maria at Peoples Gas. In your testimony, you talked about how this
project has been paused for two years.
Um, you spoke about, um, how
the ICC reviewed the safety concerns
that, um,
that the, that they ordered you for this
project. Um,
we talked about how many miles of pipe are gonna be
addressing in this to the date.
Do you have the resources to complete this job right
now?
The reality is, is that given the accelerated timeline, um, we do not
believe that we have the resources needed, um, to
execute, um, the program. But with that said, you
know, you heard Leighton and Sean talk a little bit about our commitment to one
another. Um, we are exercising every lever that we can think
of. Um, you might have recalled in my earlier remarks, um, we are looking
to expand, uh, capacity and pipelines with, uh, Chicago Public Schools
to work with more high schools to increase that local hiring.
Um, we have explored, um, uh, discussions with Dawson Technical
Institute to maximize capacity there.
Um, we're confident that we will do everything in our power to, um,
address the ICC's directive, but, um, we are very conscious
and cognizant of the resource availability before
us.
And, and can you explain to me
how you work with the city, the City of Chicago, like
CDOT, Water, to execute your projects?
Can you, can you explain a little bit about that?
Sure, um-
How you work with the city.
Yeah. Thank you. So our infrastructure work is very closely tied to two agencies,
um, CDOT, um, as well as the Department of Water.
Um, we have for many, many years coordinated,
um, uh, and worked well together. Um, are there always
challenges with the amount of infrastructure work that we all have? Certainly.
Um, I would say with this iteration of the program, given the accelerated
timeline, it is critical now more than ever that we are able to work
with our city partners in that careful coordination.
I think you've heard everybody acknowledge that, you know, some estimates are as
high as two hundred miles per year.
Um, I think given the historical numbers that we're all aware of, um,
as I said, it will be critical that we are able to coordinate in order
to achieve, uh, that timeline, um, on budget,
on time, and to meet the ICC's directive.
Um, just to give you a little bit, um, you know, our, uh, the city's Office of
Underground Coordination is responsible for reviewing our designs and
approving them, getting them out the door.
After that, um, we receive permits to go ahead and actually
execute the work. And so that's really a two-step process that we are always
looking to, uh, partner and improve on.
I am concerned about these rate increases, the rate increase for the
residents in my ward, and I think my colleague from the 12th Ward did
ask that and how you work with residents on addressing their
bills to help, um, with the cost of their
bills. Uh, are, is there anything else that we can work together
to lower the cost for the city residents of Chicago?
I mean, yeah, we're certainly open to any and every idea, and we're willing to work
with our stakeholders. Um, as I, as I think about your question, Alder,
um, Alderman, I, I would say that one area is I
think about our relationship with our city partners.
Um, coordination really ultimately translates to costs.
As I said before, um, you know, delays, um,
unintentional of course, um, can, can lead to unintended,
uh, cost escalation, schedule delays.
Um, I think we have the right, um, programmatic, um, controls in place
to, to help manage that, but it will also depend on
partnership.
And I know the Citizens Utility Board, also known as CUB,
they couldn't be here today, but I've worked with them in Springfield on
helping residents. So I hope to hear from them very soon.
I do wanna touch on the ICC
and their decision on
making sure that you execute this order.
Um, do they have the power to improve...
to, to modify your rate request?
Do they have that power to do that?
Ye-yes. Um, the, uh, Illinois Commerce Commission is,
uh, the, uh, sole authority that, um, is able to
approve or modify any portion of our program and/or
any future rate request.
So they could modify it and appr- or approve or disapprove.
Correct.
They have that power to do that.
Yes.
Is there... If you can help me understand that
process in terms of the ICC, is there public comment in
that? Are people able to comment on that at the
ICC when they're making this decision?
So, um, I will say-
In that process.
Yeah. Two, two things. So, um, much like today's, um, committee hearing,
uh, folks have an opportunity to make public comment before, um, a bench
session. So to the extent, um, you know, folks would want
to comment, that's always available.
Um, they're a public agency, uh, just, just as this hearing is.
And the second avenue, I would say, is that, um, uh,
interveners like CUB or PERG or 18007 or
the city have the opportunity to intervene as former, uh,
formal interveners in a proceeding.
And my final question,
Abe Scarr mentioned electrification.
I wanna get your thoughts on that, um,
about mandatory ele-electrification.
Can you, can you tell me
your thoughts on that?
Uh, sure. Let me, um, answer it this way.
I, I will say that number one, electrification
is a non-pipeline alternative, and, you know, you heard us
talk a little bit about how, um, we are, um, implementing an
economic analysis that will ensure that any investment that we
make, uh, related to PRP or, quite frankly, any other
workload, um, is cost effective and, um, with an eye
toward main-making sure that, that any investment, whether it
is an NPA or the retirement of pipe, um, is
affordable for our customers.
Mm-hmm. Um, now I wanna turn it over to
Sean with the Gas Workers. You told my colleague in the
44th Ward thatBack in twenty eighteen, you had
about thirteen hundred members, and now it's nine
hundred and eighty-two. Did I get that correct?
Yes, Alderman.
How many more members would increase
with this project that we're talking about, the PRP project?
How many more members?
So up until now, there hasn't been any concrete
data shared with the amount of supplemental
work- workers that would come in to supplement eighteen double oh
seven. So to simply put,
if we have a thousand members and
People's Gas is thinking about bringing in two hundred
outside contractors to do our traditional work, we would know
that we need to hire at least two hundred more people and get them ready to go.
We don't know how many outside supplement we're gonna get.
We have m- many discussions about that.
It's never been concrete in an answer on how many they need to
bring in to supplement our workforce.
'Cause you did mention that in your testimony, that supplementing
traveling is a cost. It's a high cost.
It's a huge cost.
It's a huge cost for you.
Not for me, but-
When we're out-- when we're not using members in Chicago, and you said ninety-five
percent of your members live in Chicago.
Yes, ma'am.
Okay. Um, and my final questions is
to, to Abe. Um, here in your
presentation that you gave us to committee, you mention
NPAs.
Mm-hmm.
Can you talk a little bit about that, NPAs?
What it is just-
Sure
... in a nutshell. Help me understand what that is.
NPA is a non-pipeline alternative.
Uh, there's, there's a corollary with electric utility of a non-wires
alternative, and the basic idea is that utilities often
can, uh, achieve the same service
goals, uh, with less money by considering alternatives to
traditional utility investment.
Um, in the end of the investigation that end, ended in February twenty
twenty-five, the ICC concluded that, uh, the
NPAs should be explored specifically in the City of Chicago given
the age of the system here, the, the retirement
directive, uh, and the opportunity, I'd say, for NPAs.
We had a workshop process that covered several months this past fall, and there's a
final report that you can read, uh, online at the ICC's
website. And, um, uh, I'll, I'll try to r-
respond to the chair's, uh, request to keep it brief.
I'd be happy to talk more, but I just, uh, basically say that we think,
uh, incorporating NPAs and really embracing NPAs,
uh, should be part of the PRP going forward.
Uh, that that's what it means to have it be a retirement program and to start with
retirement and not replacement is to really, uh, vigorously
investigate these non-pipeline alternatives.
Um, we're happy that the, the utility is moving
towards that, but we'd like to see it move faster.
Can you help me understand the NPAs?
Can you name one project anywhere in the US
that does NPA that is cheaper and more affordable?
Can you name one project?
I don't, I don't think I've come with a, um, a project in
mind. But, uh, this does happen all the time with
utilities. Uh, and it should be a part of normal utility business
practices to consider alternatives and not just
default to what they've done in the past and what oftentimes is more
expensive, and they have a profit motive to pursue a more expensive path.
So-
I-- Yeah. No, I think for me to understand the NPAs much more, I
like to see what other city is, has implemented that to
see how it works and, and see how that can work for the City
of Chicago.
Yeah. And again, I think these, these do happen all the time.
One example I could give is that, um, instead
of, uh, pursuing for, for example, uh, expansion,
that's not what we're talking about here, but sometimes utilities need to expand to
meet load. Uh, another alternative to building out,
uh, greater pipe, uh, facilities to handle that
increased demand would be to decrease the demand and make specific investments in
energy efficiency in households such that the greater pipeline capacity is
no longer needed.
So right now you can't name one project-
No
... in anywhere in the United States?
No, just 'cause-
In this country? No.
Uh-
No. You cannot name it right now?
Well, y- no, 'cause that's not something I've spent a lot of my time on, but I'd be
happy to follow up and give you multiple projects.
Well, it, it is all over your presentation, so I just wanted, you know, that's why
I'm asking, just to understand it better.
Yes, and I believe it's actually quite common.
Um, and I've not, not been asked to deliver a specific project before, so it's not
something I'm, uh, it's-
Uh, I'll say Alder, Alderwoman Tavaris, um, we're happy.
It sounds like maybe that's a through the chair request.
Yeah, be happy to follow up with that.
Um, for some examples of NPA projects.
Good. Thank you. Please follow up with the through the chair.
And then the last question, because you mentioned one of the solutions in your
testimony is
electrification. So I just, I
wanna... You think that that should be
mandated? Do you think we should mandate electrification?
Uh, certainly not rapid mandatory electrification, no.
And what-- You mentioned that it is more cost effective.
How can you-- what is the cost effective? How much more less?
It can be more cost effective. It's not necessarily in every scenario more cost
effective. Um, I'll be happy to send through the chair the presentation, or
it's linked to in my testimony if you have an electronic copy of my testimony.
It's linked to the presentation that our expert provided in the NPA
workshop that did analyze, I think, four or five
different scenarios, different options for dealing with some
aging pipe in the Irving Woods, uh, uh, community
and analyzed, uh, the different, uh, costs and
timelines for ways including replacement, including
immediately ending gas service and r- replacing it with propane,
uh, as well as gradual electrification of those households over time
and, and did find that the electrification scenario, uh, h-
was the least cost option.
So there are studies out there?
Yes. Well, this is an, uh, an illustrative analysis, uh, that we
provided in the NPA workshop.
So let's take a house in Chicago that was built in
the nineteen fifties. If we electrify, if we go electrification, how much
more cheaper will we be spending a month?
It, it would really depend on the household and the energy use of the
household. I don't have a number for a generic house.
Okay.
Well, thank you.
Thank you.
Those are all my questions.
Oh, I've got a point of information from, uh, Alder Vegas.
Thank, thank you, Madam Chair. Um,
to the gentleman on the f- my far left.
Abe. There you go. Sorry about that. I was in and out.
Um, my colleague from the twenty-third, uh, Alderman Tabaras asked about the cost,
um, wh-whether it's cheap or not. Do you have a cost for, like,
the, the trans-- the, uh, retrofit, what that typically would be for a
house n- nineteen fifty? Just curious. Any ballpark numbers?
'Cause I've heard numbers anywhere from twenty-five to seventy-five thousand
for-
That sounds more like a question, not a point of clarification.
Oh, I'm sorry. You're right.
But I, but I think I, I-
I've heard similar ranges.
Yeah. And I think it does... Again, it does very depend, and,
um, I, I'll, I'll try to address
this. We are n-not stating that there are not
costs with a transition to, uh, clean energy
homes. Uh, we believe that if you compare the costs
of reinvesting and refurbishing the entire gas pipeline
system with the costs of electrification,
that electrification comes out ahead, and at the end of the day, we
have, uh, safer and cleaner and healthier homes.
Yeah. Thank you. Um, uh, I
also just wanna point out as we-we've got, um, uh, um, Alder
Sigcho-Lopez, then Alderman, uh, Hopenworth up next.
Um, so members, if you wanna be on deck, let us know.
Um, but just wanna also note that one of the other NPA
projects, um, is also pipe relining.
Um, so when we talk about alternatives, not all the
alternatives are no pipes or electrifications.
And I think that as we try to think about a
practicable, um, scale of
solutions and things that we're hopeful bring down
costs, achieve safety, right, and serve
constituents, um, I know we've, we've discussed that
previously in this committee, and, and that was also a very
promising, uh, project. So just a,
a note there. Um, Alder Sigcho-Lopez.
Thank you. Uh, thank you, Chairwoman, and thank you everybody for coming and
testifying. Um, also thanks for everybody who sh-shared their
testimony and the direct impact, um, that, uh, these
decisions will have not only on the affordability
of, um, utilities, but also on the well-being and health of all
residents. Um, I would like to start with the,
um,
with the,
the decision to, to expand and double
the, um, infrastructure work. Um, what I'm
hearing is that the infrastructure work will go for two hundred and
fifty million dollars per year to doubling that between twenty twenty-eight and
twenty thirty-four. Um, and the impact that
this will have directly on the pockets of, of, of our constituents.
Um, as of today, we see that gas bills
are on the rise despite of less consumption
in Illinois residen- Illinois residential,
um, customers that consume twenty-six percent less today
compared to twenty fourteen. Um,
also the fact that it seems like a lot of
the,
a lot of the customers are paying for pipe replacing,
replacement rather than gas itself.
So my question is this directly around the recommendation for the
Illinois Commerce Commission to scale down the pipe
replacement plan, um, and
what is your direct response into the effects that this will have on
affordability, uh, especially in the times where twenty percent of Chicagoans are
burdened by, um,
gas bills and are really, is staggering that half of the
residents in Englewood are also burdened.
And I would like to, to have a response by the different perspectives.
Thank you.
Uh, thank you, Alder, uh, for the question.
Um,
listen, I'll say that, um,
we don't win when things are unaffordable for people, and that's not what this
program is about at all. Um, I'll reiterate, it
is about safety. But I do wanna spend some time, um,
just having us think about
what
it means to maintain a safe and century
scale urban system. Um, there's a long-term
value of doing that the right way. Um, I know some,
some folks don't like to hear this, but there are, there are pipes that
date back to over a hundred years. Um, I would say that the
value associated with that investment, um, has brought
significant savings for payers over time.
But the reality is, is that at some point, these assets come
to their end of their useful life, and we see that show up in our grade one leaks,
our grade two leaks. We have the data that supports that.
Um,
so this is not really about, um, trying to make
things unaffordable. It really is about trying to make things
safe. Um, we are always open to doing in a measured
way. Um, as we said before, you know, this is a, um,
mandated directive. Um, it is not a business decision.
Um, but we are open to partnership and to figuring out ways we can do that that
is, um, affordable, ensures a steady, reliable
workforce, um, and is something that is predictable
without, um, significant disruption to our city and our
residents.
Thank you for the question, Alderman.
Um, so I'd say, uh, this on affordability.
As I said earlier, uh, we can only expect rates to
rise significantly with the current plan of action, uh, more than
doubling capital spending on a yearly basis.
And capital spending is what drives rate hikes.
The more a utility spends on its infrastructure, the more rates
rise. Um, People's Gas has already been spending significant amounts over the
last decade, and I would argue that the
affordability burden that placed on Chicagoans was
not felt as much as it may have been because that was overlapping with
a period of historically low gas commodity
prices. Uh, this is the fracking boom.
We were not at that time exporting much gas, so we had a glut of gas in the
United States that could not access the world market.
That meant the supply side of our bills was very low while the,
uh, delivery side cre-crept up. Now we're talking about
jacking up the delivery side more while the supply side is also higher
and could grow even higher. And so, um, we're already seeing in
certain parts of the, uh, Chicago and have seen for some time, as you
quoted, some very, um, deep, deep-rooted
affordability problems. And my concern is that that will get much worse
and, and spread, uh, beyond, uh, you know, frankly, it's low income
communities that are, uh, dealing with the affordability burden now.
Uh, I think we'll see it spread, uh, to, uh, broader swaths of
Chicago, uh, if action isn't taken to rein in the costs of the
program.
Thank you, uh, four for your responses.
Um, to me, in despite of the
order from the Illinois Commerce Commission, um, to scale
back this and, and reevaluate, especially around the affordability,
it seems like this will not only continue, but worsen the issue of
affordability, uh, when capital investment is driving
costs. I, I do, um, hear
oftentimes in my community people burdened by utility bills, and
I don't think this is going to make it any better.
Um, in terms of the-- to the
safety component, um, that was discussed around fossil
fuel industry, in terms of the, the significant effect that it has
on, um,
on the climate, we see that as, um, as a significant
issue across the world. My question also, as you
mentioned, I think the... and this may be for labor, um,
that, uh, there may be also thinking about
hiring,
uh, non-local residents, uh, or lo-non-local labor for
this. Um,
how-- Two questions in this. How is this on the long
run safer when we see the issues on climate
change? And two, how is it safer to
hire
non-local versus qualified labor locally?
As far as the climate goes, um,
I dug holes for a living, so that's outside of my purview.
Um, I could give an answer back to the chair.
I'll do a little bit more research and try to help you out on that one.
But, um, as far as I wanna call subject
matter experts, you know, people that live, breathe,
eat, buy lunch, shop within the city of Chicago
have more of, um,
passion for their residents, their neighbors, their family.
When people from outside the state start doing some of this
work, what happens is they'll come in, do a
project, and then they're gone the next weekend.
There's nobody held accountable for any substandard work.
Um, my members have been doing this work exclusively since nineteen
twenty-eight. No outside contractor of-- has
ever crossed the threshold to go inside a house in the city of
Chicago since nineteen twenty-eight to do the final meter
tie-in and then to light up the appliances.
When we leave that house, it's in the safest manner possible.
We go through extensive training.
We go through a th-- every three year, uh, PHMSA
mandated OQ program, which is, is
f-far, far better than any suburban or, um, sorry,
surrounding utilities like Nicor, and I'm not sure about
Ameren, but their-- our OQ program supersedes anything anybody does
in this industry, and we're held to that standard.
And luckily, since we've been doing this work, we've been the safest
workforce possible, and we wanna continue
that.
Thank you. And my last question is, um, and it's clear
that we are spending a lot more on, on gas infrastructure than
before, and this is-- and, and we're not unique.
I think this is a trend across the country.
I am, um, definitely, uh,
I'm definitely concerned about the investment of more infrastructure that in the
long run is, is not only unsustainable, is less
safe, and, uh, it will take us to, um, the
collapse of the whole, um, environment.
Um, so in, in that regard, and again, just for
everybody, uh, why is it that we're spending so much money on
infrastructure that in the long run may be obsolete, and
isn't it safer to invest in cleaner energy
now rather than burdening our residents with
infrastructure that in the long run not only will be obsolete,
oftentimes will be unused, yet we're gonna have to pay
for that now in a time where people are barely
make ends meet? And also, we see the escalation of conflict
abroad in a time where, um, I think that we
are, um, all in agreement that cleaner
energy and infrastructure now will pay bigger
dividends. So I like to g-
Illuminate me as to why this is a trend across the country.
So, uh, the trend in gas infrastructure spending across the
country, uh, is really significant.
Um, I believe over the last decade, annual gas utility
CapEx has risen from somewhere around twenty-three billion per year to close
to fifty billion per year. It stems, uh,
specifically from a call to action from the-- PHMSA has
been referenced, it's the Pipeline and Hazardous Materials Safety Administration, a
federal administration that called for the acceleration of, uh,
retirement of, uh, at-- aging at-risk pipe, like
cast iron and ductile iron, which is in the Peoples Gas system, and unprotected
bare steel. Um, what we've seen is a ton of spending, like here
in Chicago, uh, to deal with this risk, which is a real
risk, but not necessarily the improvements to safety that we should
expect from them. And, uh, we believe that with a
more rigorous approach to risk and with more alternatives considered,
uh, as we've been saying here in Chicago, but this is true in Baltimore and up and
down the East Coast and in, in the upper Midwest, that many, uh, what are
now pipe replacement programs should transition to be retirement
programs, um, that can more cost effectively deal with the safety
risks, have a, you know, an accurate understanding of what the risk
actually is and deal with it, rather than just a blanket, "We're gonna throw money
at the problem and just replace all this
pipe."
Um,
through-- Oh, the vice chair. Um, but I'd definitely like
to, um, like to follow up. I think this is important.
We see, uh, many seniors in our community, many low-income families
struggling. I think that the, um, the issue of
affordability, it, it really impacts the most vulnerable.
And, um, I would like us to work, even though I know the city does not have direct
jurisdiction, but I do think that we should be working with the state to address
this. It will have direct impact on affordability.
And again, in a time like this, I do think that we need to act
responsibly, not a short-sighted what's, uh, convening in the short
term, but think about the long-term implications on affordability and
also the impact on the environment.
So I'd like to, uh, think as a committee on how we can work together
and, uh, uh, reach out to the Illinois Commerce Commission to make this a,
a call to address both sustainability and affordability for the
city and the state. Thank you very much, chairwoman.
Thank you so much. Uh, Alder, uh, Manal Happenworth up
next.
Thank you, Chair.
Uh, I
represent the forty-eighth Ward, which is Edgewater and, and
Uptown, and very close to Loyola. So
I've had many students, along with a Illinois public interest
research group, call and email, come to, into my
office, um, because they're very concerned about this issue.
My, my area, we are mostly renters, over, over
sixty percent. We are an older population as well,
a lot of, uh, older adults on fixed incomes, and,
um, a very diverse group of, of folks
a-across, uh, race and eth-ethnicity
and, and people. A-as others have said, um, you
know, affordability is at the top of mind of everybody's, uh, concerns
these days. And, um, and, and I'm having a
hard time explaining to them what is going on here.
So my understanding is that the, the product itself, like
what people are paying for, the gas itself, that has not
changed. But what has changed is the cost
of, um, service to replace these
pipes. And a-and so even though they have not
changed the way that they have used their utility, their pr-- their,
um, utility bills have gone up, and this is very confusing
to them. Um, and it's also confusing to them when they
see that, um, Peoples Gas has
recorded record profits, you know, um,
and trending up in that way. Um, I'm, I'm glad to know
that we're, we're not gonna have any major, um, any
major pipe replacements in the next year, thank goodness.
But, um, you know, it is very disruptive, so I, I, I appreciate
the commitment of Peoples Gas to work with
us, uh, and in our communities if, if that does happen.
Um, but I'm, I'm, I'm curious, somebody said something, a
rigorous approach to risk, and I, I'm just
curious, what, what does that mean, and what, what is
missing right now in terms of what people are asking for,
which is, you know, accountability, um, and
transparency to, to your decisions that, that you
are, that you are making right now that's impacting our, our, our
neighbors?
I can take that one. Um, and I'll take it from my perspective
coming here new, and then what I see that's a bit different
from, um, other companies I've been with.
Um, the rigor attached to project authorization,
the consideration of NPAs definitely differ from what I've
seen in other, um, companies. But here, here's the challenge.
Um, I respect all of the points that
have been made as it relates to affordability.
The challenge when you have an aging infrastructure, we do not have
the option of pausing
safety obligations. Now, I've been part of a system where we had a
safety incident due to a pipe rupture.
Thank-thankfully, no injuries, no
property damage, but this was a situation where we had a storage pipeline
rupture two hundred feet from a swing set.
So part of the challenge with our industry is finding that needle in the haystack
of aging infrastructure, um, whether it's bare steel pipe,
whether it's ductile iron pipe. So you're, you're, you're
spot on. Affordability is always gonna be a challenge, but-
In tandem with the safety obligations that we are
required to fulfill as a pipeline operator.
So that, that's the challenge that we have every day.
Um, but that's why I view this as a pipeline safety project,
not a project for profit. This is a pipeline
safety issue that we're seeing across the country.
Thank, thank you for that. I, I know you just said it's, it's not a, a project for
profit, but, but your records do show that you have had record
profits in the last couple years. Um, so...
And I know that you, that you are
prioritizing cost effectiveness.
I know this is important to you. But, um, again, like, we, we don't
make these decisions here at city council, right?
We're gonna have to wait until the decisions are made by the ICC
about whether or not you get your rate increase.
In the meantime, I have, you know, students
and, and seniors, and working people who are really struggling right now.
And so I'm just, I'm just trying to bring back good information to
them. Um, I guess one of the things that I see in
this report is that in 2014, there was an
investigation. There was, um, there were
mathematical errors in the People's Gas
previous risk assessment mythology-
methodology. And so I'm
wondering, Alder, um, Ramirez asked earlier,
you know, what is different now than before?
And can you tell me a little bit about what you're doing now
that's different in terms of transparency and
perhaps the, um, the way that you
are evaluating and sharing information to us?
I'm, I'm referring to the, um,
the JANA, the JANA and PIRG,
um, work that was done.
Uh, thank you for the question. I will, um, attempt to answer it.
I, I won't comment on the 2014 report.
I'm not familiar with it, but I'm, I'm happy to, uh, supplement to the extent we
can with the chair's office. Um, with regards to, uh,
transparency and our risk reduction model, uh, you are correct.
Um, this, uh, this program implements the JANA
model. Um, it is well understood and accepted widely in many,
many gas utilities. Um, what I will say
is, uh, and I'm not an engineer, so I'm gonna let Leighton, you know, weigh in as,
as he see fits here. But, um, in summary, Alder, uh, the
JANA model enables us to look at our assets on the system
and assign a risk based on its evaluation
of that system. The business decision then lies with us in order to determine
in what order and in what priority we should address the risk on
the system in order to reduce that risk.
Um, our engineers have developed, um, a way by which we can
use JANA to quantify risk reduction on a per mile
basis. Um, in addition, I think the other thing that's different about
this, um, and A- Abe spoke a little bit a- about this in his
commentary, uh, prior iterations of the program relied on
a neighborhood approach. So it was a suite of, uh,
work that was done in Edgewater or a, a different type of
neighborhood. Uh, but that program involved much more than
main replacement. Now, the ICC has directed us to focus
on just the main replacement, and that's exactly what this program does.
So we are really, uh, focused on the main and reduction of risk
with that main. The alternative analysis that we looked at is
whether it's double decking, like Leighton mentioned, a, a do nothing
approach, um, or addressing, uh, leak by leak over
time, um, are options. Soon to be, we will incorporate the non-pipeline
alternatives. But all of that, I hope, um, at least somewhat
answers your initial question around risk reduction.
On the transparency side, um, we have the benefit of having a safety
monitor that was appointed as part of that order, uh, by the
ICC. Uh, they are onboarded. Uh, we report to them
regularly. Um, the other thing about transparency, I would say,
is we have a, a project management organization that
spans, um, the highest levels of the company all the way up to
the CEO. Uh, there are routine meetings.
Um, we have routine meetings with the safety monitor.
The safety monitor is scheduled to provide a report to the
ICC, um, on or before, uh, sometime in March of
2027 with its findings. Uh, they have begun
conducting field visits. They have sent a number of RFIs or
requests for information, uh, seeking to understand both JANA
and a lot of what we have developed as part of this program.
So there's much more I can share, but I hope that gives you a little bit of flavor.
Thank you. Yeah. Just... Thank you.
Um, the, one of the last things that you said that is that the safety monitor will
not be handing in the re- report until
2027 until-
Uh, the ICC's order directs the, um, uh, uh, the safety
monitor to do it on or before. I don't know the exact date in March, but March
2027.
So that report or any midterm
report findings won't be, uh, available before
November?
I don't wanna s- commit the safety monitor to its, uh, its deadline,
but I, I would say they have until March.
Yeah, I'm just, I'm so curious about it because we just had a major water main
project on Ridge and, and Edgewater was...
And some of those pipes are 100 and, you know, from
1839. You know, I imagine, um,
that what you're working with is very much the same.
I, um, I, I am curious about how,
how you, how decisions are getting made.
Uh, can you make a commitment to, to us
as alderpeople, as to, um, you know, the advocates
that you're gonna provide some kind of report before
November about, um, if it cannot be from the safety
monitor, something towards that end?
Like, how-How are we to know the
progress if we don't know the baseline?
You have my commitment on behalf of Peoples Gas, and me personally,
that we will do anything we can in our power to continually
update every ward, every alder, uh, to the
best of our abilities. We're, we're more than happy to schedule meetings and
provide what we can. We're happy to invite you to biannual forums, help you
prepare or weigh in on those. Um, happy to make an introduction to
the safety monitor. We are an open book, and we are committed
to answering whatever it is you need.
I'm happy to supplement this hearing, um, if, if, if there's other questions that
you still need answered.
Thank you so much.
Sure.
Thanks, Chair.
I, I just want to make a point of clarification. I apologize.
There was a typo in my written testimony.
It was the 2024 investigation, not the 2014 investigation, so I don't
want anybody trying to track down a 2014 investigation.
I caught it after I submitted my testimony. My apologies.
Great. Thank you for that clarification, Abe.
Um, I know we've got a couple other folks who want to ask questions, but I have
some questions, so I'm, like, gonna use my privilege and throw myself in
there. Um,
a couple, a couple rapid, rapid fire things, and, and this is again
for committee members and for members of the public.
These documents, uh, will be available on the clerk's site, uh, when everything
is published. Um, you know, I want to thank, uh, the Peoples Gas
team for, uh, you know, answering questions and preparing
information in the packet. Um, a few things following up from,
so questions that we posed to you and information that you gave back.
Um, we, we l- wanted to know and, and
talk about, I know we've talked a little bit about the, um, you know,
roughly one in six or 18% of the
Chicagoans, um, who are Peoples Gas customers being in
debt to Peoples Gas. And I know that we requested some
information about kind of a breakdown by ward or zip code, and perhaps maybe a
visualization of that. Um, uh, in
response, uh, you guys directed us to the ICC
website, um, which there is a portal for data.
Um, I'm gonna just push back and say it's not
very helpful.
The data portal's there, yeah, but it's not really getting at what
we are asking for, and a tool, like, we kind of asked for that in a
specific way because it's what's gonna help
alderpeople have a better understanding of impact.
Um, so, um, I'm just putting through that again, and through the
chair. Um, I also know that, you know, through the portal, like, yeah, I
can go and do the drop-downs, but you have the
data. It's literally taking
data, sorting it by zip code, and running it
through a tool that I'm sure you have available to you.
Um, and so we, you know, we, we make requests like
this to try and set us all up for success, um, for
information that is usable for us and for us to take back to our
constituents, and for us to know how to, um,
frankly prioritize. Like, hey, do I have a lot of people in my
ward
that, that are in debt to Peoples Gas?
How important is this issue to me? Um, so these aren't,
these, these aren't just kind of random things that we request.
Um, and I think that a company, um, the size and with the
resources that you guys have should have been able to actually give us
this data in the way that we asked for it.
So I'll ask through the chair if we can follow up on that.
I do think it'll be helpful. Um,
and, um, uh, similarly, I, I
know we asked, and it could have been the way that we asked it, but we asked for
just some projections of kind of how many,
like, number of lines you think you could retire per
year. So knowing, like, hey, with the proposal you've made, with
ICC's ruling, we know that
it's something, you know, about 150 miles of pipe a year
roughly, if it were, like, consistent and over a year, right?
That's our average estimates, but we are not the experts, and we
know, a- and I would anticipate that it's not gonna be the same
amount of pipe every year, that there's going to be an ebb and flow, that there
might even be a ramp-up. Um, so I think our question was, hey, how
many number of lines per year do you think would be retired, you know,
over the course, like, up till 2034?
And your... The response we got, I feel like was a little
inadequate. It was like, hey, we don't know
until we get going what the average is going to be.
I would gather, especially, uh, with the partners
that you've got here at the table, I see Sean taking notes here.
I would gather that you could probably give us a general idea of what your goals
would be, because that, that's really what we're asking.
So just, like, I'm not asking for, like, a commitment of
a, you know, tell us and we're gonna hold you to this, of like how many lines
you're getting done. If you could help us see what the bigger picture is,
that's, that's just... So through the chair, help us see the bigger picture of what
that impact looks like. Um, and if you're even able, I think,
um,
uh, to help us, again, this is not, like,
trying to hold you to a commitment to tell us exactly what's gonna
happen, but if you could help us to see what that looks like over the city as
well. So understanding the scope of the project, but also the
geography. So knowing what you do about the safety
issues and where pipe retirement needs to happen,
I think that that's what we're getting at here, is not a, not a
promise, not a commitment, not something we're trying to, like, you
know, say, "Hey, you said you were gonna come to Rogers Park, and you were gonna go
do, you know, 20 miles of pipe." I don't think we have 20 miles in Rogers
Park. Um, but
um, so if that's helpful, I would really appreciate, um, if you guys
could look at that, and I'm happy for our team to follow up, just to get,
like, help us visualize, help us get, like, that bigger
picture of what is-What the impact on
Chicago is gonna be, um, uh, just for clarification.
And then a more direct question, um, uh,
hydrogen initiatives. So, um, if you guys wanna speak a bit
about, um, the future. So as we talk about
MPAs, as we talk about, um, other
technologies, I know that, um, I've
said this before in, in other spaces that we've got, um,
Chicagoans rely on people's gas,
where we're heavily reliant on you all.
Um, so when we talk about your profits, when we talk about your service
delivery, um, you know, you guys are in a unique space.
You're a private utility making private profits.
But as a Chicagoan, I don't really have a choice on whether I use you or
not. So, right, so we-- you're heavily regulated in this space in a similar
way that a public utility would be.
Um, so we get to have, um, more of a
relationship. We can put it in a, in a positive spin.
Um, we are partners, right? So Chicago, the
city, um, as a Chicagoan, like we are your
partners, and I, um, care a lot about our
future.
So I know that the safety piece, the, the PRP,
um, I hear, I hear what you're telling us, right? We have to do this.
This isn't an optional thing, and we're being told by,
by the state commission who governs us we have to do this.
But I'm wondering if you could speak a little bit about how is People's Gas
preparing for the future. So, um, you know, President Bocanegra, when I
hear you talk about the largest gas drawdown in US history with
that deep cold, and, um, I know that we're having
these climate swings more and more, you know, hotter temperatures,
colder temperatures, um, different stresses.
So when I hear that, I imagine we're gonna see that again, just like,
um, you know, in our other, other space when we have flooding.
Uh, I know we talk about like the markers that we used to use for
like, hey, a ten-year flood, a twenty-year flood. Those things have changed.
I imagine we'll see that with our deep cold, and we already see the
larger impacts it's having across our geographies in the nation.
Um, so knowing that
things are changing, demands are changing, um, but you guys
have a system that we as rate payers and you as a company
are very invested in. So whether it's natural gas we're
using or some other alternative that we're using, um,
share a little bit, uh, about w-what's the future hold for
People's Gas and what kind of investments or, or time or thinking are
you guys putting into that?
I'll start. I don't know if Leighton wants to, to add anything.
Um, what I can tell you, um, thank you for the question.
Um, I will say that, um, we, we are looking at hydrogen.
Um, I'll make two points, and then I will definitely, uh, try to attempt to, um,
you know, supplement, uh, through, through your office.
Uh, the first is, you know, we have done hydrogen pilot, um, initiatives
over at our central training facility, uh, with EPRI.
Um, those are very demonstrative. They're just early learnings.
Um, again, I'm not an engineer, but what I do know is that, um, the
hydrogen molecule is much smaller, um, and with the
pipes that we have today, it will be critical to replace the
CIDI in order to accommodate the size of the molecule so that
it doesn't seep through, quite literally, the, the pipe.
Um, otherwise, I mean, we are excited about the future.
Um, that's exactly what we would, um, want to do in order to
position Chicago, uh, toward that sustainable
future. Um, there's still a lot of, uh, probably, you know,
studies that, that need to be done and, and we're very open to that.
But, um, as I understand it, the molecule itself, um, cannot be
accommodated with the current system that we have today.
C- as a quick follow-up on that, um,
do some of the, uh, some of the, like as we were
mentioning, the kind of pipe relining piece, I know
that that,
as we talked about kind of full replacements, I'm wondering
perhaps that if there's any kind of opportunity for as that
technology grows and improves, um, to potentially be
a, a solution for the, um,
material and the porousness of it.
I can chime in. Definitely. I, I think that's what I like
about our program that we are evaluating all options
as, for every project. But I can share my experience with hydrogen
initiatives. Um, blessed to have been part of three hydrogen
blending initiatives in
states across the country and also in Canada, and I think Maria kind
of touched on it. It's the challenge that I've seen in the past.
Um, you still have how do you manage
the volume needed to heat residential communities with hydrogen and then
the safety concerns attached to
that. I'm a fan of those
initiatives,
um, but you do come across some of the same challenges that you have with
gas, the cost. And then Maria mentioned
it's intended to be transported within your existing
piping system. Um, so in
essence, to promote a hydrogen initiative, you would
still need some retirement replacement to
house that, that transport of that, that energy.
So definitely you're correct. I've had some experience in pipeliners.
Challenge there, it's a limited population of
pipelines that you can use it for, those where you have limited number of
services. But I love the fact that this is part of our
process now. Um, this is part of the analysis that takes place for
every project. Um, what option is
need confirmed outside of replacement and
retirement?
Great. Um, thank you for that. Uh, and I'll just clarify,
um-This is, you know, in my mind, this
is holding multiple things at once, right?
So like the, the PRP work that has to be done, and
I just... I urge Peoples Gas to
also be investing in thinking about your future, right?
So as a consumer, we're being asked to
pay more to repair, right, repair and
improve a system that we're all using. That's, that's the PRP.
Hey, we're using the system, the system needs repaired.
Um, we can, we can set aside, um, uh, for
the moment a lot of our consumer complaints and concerns about like,
what were you doing before with all of our money that you've taken,
right? But we're here, we hear this, you
gotta do it, and if we are all investing
shared money, um, and labor
into the new system, it's important to know that
Peoples Gas has a plan for the future of that system as well.
Um, that- that's more where I'm coming from there.
Um-
If I could say something real quick.
Oh, yes please.
So, you know, as far as the hydrogen goes, you know,
I'm gonna use some of your words, right? Investing in our future.
So local 18007, uh, had a, took a form, a
forward-thinking approach in our '23 contract
negotiations, and I'm gonna read directly from our contract
which, Chair, I could send a copy to you as well if you need it.
"The company and union agreed to discuss natural gas industry changes affecting
local 18007 existing and po- and
potential new work opportunities due to influences such
as electrification, regulation, legislation,
technology and alternative energy sources such as
renewable natural gas, hydrogen, wind and
solar." Forward-thinking, I was part of this
negotiations. I had a back seat to it, but the thought process was
anything changes in our industry, which we all knew was happening,
right? We're at the table. This local talks with the company in
regards to any changes. So I'm proud of that language because it shows that
we're all looking for a cleaner future, just it's not right
now.
Thank you for that. All right, I've got, um, Alder
Villegas, then Alder Martin.
Madam Chair, thank you. Uh, I just had one qu- one question around
CIPP. Is, when you're talking about the liners and piping, cur- is that what it
is, cure-in-place piping that you're-
Yes, yes
... that you're referencing?
Yep.
And, uh,
what's the time, how long does that CIPP traditionally last?
'Cause we're talking about pipes that have lasted 100 years, so I'm hoping that
CIPP is a solution that, or technology
rather, that
lasts a little bit longer.
You stumped me with that duration question.
Um,
that's definitely something, like, we can get information.
I've had experience with pipe liners, not only in gas but
m- majority of the time it's been in storm s- systems.
Yeah, so you got, yeah, usually for liners for
non-potable, but now they've, they're starting to use it for-
Right
... potable-
Right, so I don't wanna-
... specifically in Canada, yeah.
Right. I don't wanna quote that wrong timeframe as relates to
gas.
Okay.
So that's definitely something I can, will get back to you with.
Yeah, if you can get that through-
Yeah
... the chair, 'cause I know that there's, uh, uh,
as we're trying to, as you guys are trying to hit that 10-year mark-
Yeah
... that i- that allows for, uh, an
opportunity to realize some cost savings but some, also some efficiencies, since
we know that the, um,
when you're tearing up the streets and stuff like that, and sidewalks, that's
where, uh, s- some of the cost gets, um, is part of that
cost as well.
And the challenge we had with liners is the same with gas.
Um, you're limited, you want it in a situation where you have limited number of
services. 'Cause then the cost to manage the services and install the
liner become-
Correct
... problematic. But definitely we'll get you that information.
Yeah. And then, Madam Chair, I just had one more question on-
Well, I think, um, I, I think really quick.
Abe-
Sorry
... did you have an answer?
Yes. And, uh-
I think some additional-
I was just conferring with my colleague, Saad.
I believe he attached this to his testimony, so you should have it.
It's a f- FAQ from Progressive Pipe Management, which is the company that has the
license to the technology in the United States.
I'm just gonna read, "Extensive testing conducted by Cornell University and
NYSearch has demonstrated an expected service life exceeding
100 years." Um, so it hasn't been around for 100 years, so we don't know that, but
their testing demon- demonstrated that they believe it can extend the life at
least 100 years.
And that was, um, we didn't print those out, but that's attached to...
We, we did send that out to the full city council.
Gotcha. And, and that was CIPP, correct?
CILP, cured-in... Oh, so CIPL, cured-in-place lining.
Liners, okay. Yeah, CIPP for water. Okay.
Uh, and then, um, around, uh, for Peoples, this
is around the underground coordination from the city.
What I heard there was that
there's some assistance that's needed or some predictability that's needed in order
to have a continuing flow of work, so that way
you're not s- bogged down by bureaucracy.
Um, do you, does, does Peoples Gas have a, like, any ask or
plan on how, what, what we can do to help you try to get that
predictabi- predictability lined up so that way you get, you
guys can try to be successful in completing that 10-year
period?
And I, and I've had issues with, from, w- and strike that, not issues.
I've heard of issues with the underground coordination.
Uh, even though it's in their name, sometimes they're not that good at coordinating
stuff.
Yeah. I think, um, you know, so I'll, I'll share a couple of examples.
Alder, thank you for the question.
Um, you know, uh, first of all, we have metrics, so we
track how long it should be taking, uh, for things to get out of
OUC. And I wanna be clear, this isn't nec- this is not any,
um, uh, co-... commentary on, on, uh, the
hard-working folks that work there
That's my commentary. Don't worry about it.
Um, the metric is reflective of the process.
Um, so for example, there's 20-plus underground
entities. Um, the minute we drop a design, the year clock
starts. Uh, there is a timeframe associated in the rules and regulations on
how long that review process should take, but, um, it can take long
if, you know, i- in the 11th hour there's an entity that, um,
doesn't like something or wants something changed and the clock's still going.
So, um, it's really process, not people, um, I'll
say that. Uh, the, the second thing is, uh, in terms of that process,
ideally, uh, when we think about just the size and the complexity of something like
PRP and the mandate before us, the deadline
really needs to begin at the moment the design is
approved. Designs sometimes take six months, they take eight
months, and then it might get rejected for, you know, like I said, one of these
entities. Um, that is more efficient.
Um, you know, I, I'm sure there's certain things that I'm missing here.
It would require a larger dialogue, but that's just one example that we have
identified. Um, another example is the length of the
permits. Um, having to go back to permits, uh, multiple,
multiple times, um, there's a resource cost to
that, uh, to have to do that. Um, I think in other
jurisdictions we've done some preliminary research.
Uh, there are blanket permits, um, whether it's, you know, by street or
by project or, you know, o- o- other criteria.
But, uh, to pull a permit for every, you
know, one inch or one foot, whatever the regulation is, um, can be
time-consuming, and, um, if there's a delay in one or more, uh, you're looking at
a whole project that is now impacted.
So, uh, but again, I think that it's really process that we're very
open and really want to help improve.
Gotcha. So maybe if, if your, your, uh, government affairs team has some
idea around some language from potentially having a discussion
on how blanket permits versus these one-offs makes it more
quicker for you guys, that might be worth discussion.
Sure.
Yeah.
I'll take that back to them.
And this looks like a prime opportunity for the city to utili- you know, invest
in technology in order to get these permits, uh, up and running
quicker so that way, uh, can, people can f- can find those.
Then lastly, Madam Chair, this is my last question.
So the, th- just this sec- this body, uh, three years ago
passed an ordinance around sidewalks where, with the utilities,
where 60% of the... If the
utilities, um,
were impacting 60% of the sidewalks, that there'd be
coordination between the utilities and the city, so that way at the end of
the im- improvement that the residents would
have a complete block of new sidewalks
so that way structurally, uh, it was intact.
'Cause what we're seeing now is that as you
keep the squares that are there, then you put the new ones next to it, over
time the, the, some start to rise and
start, some start to dip just because they're not connected.
And so, um, wanna hope that as part of the coordination that you're also speaking
to CDOT around that, because we did pass an ordinance,
um, um, to make it more, um,
structurally s- sound for, for the residents.
'Cause it is, it is an asset that belongs to us, and so if there's an opportunity
to capture savings, if you're doing 60% of the work, why wouldn't
we, uh, the city invest in the other 40% so that way we can
complete this asset for 100%, 60 cents on the dollar we're saving there.
So just wanna make sure that you're coordinating that.
That ordinance did pass unanimously, and we wanna see that implemented
because that's, that's, uh, that's been, uh, something that's been very
frustrating for me. But-
I, I like that, um, parameter, so let, I
will definitely follow up with that. Thank you.
Thank you. Alder, uh, Alder Martin.
Wrapping us up, and we're gonna get you guys done by 2:00.
Okay.
I- I've got a good number of questions, so I'll try to be concise, and please do
the same in your response. Um, and apologies, I was at a committee hearing earlier
today, so I may ask some questions that you've already covered,
especially with opening remarks, 'cause I think I got here right when Mr.
Scarr was finishing up, so, um, please be kind.
Um,
with the, uh, with PRP, approximately how many total
miles of this 36-inch pipe are, are we
talking about?
In totality or-
In totality. Yeah. Over... So they say, by 2035, we
want you to retire all of the pipes that are
36 inches or less. What, what's the approximate
number of mileage?
Little, little over 1,000 miles have been identified as CIDI, um-
Okay
... by, within our system.
How... So I know that there was a, a moratorium in place.
ICC lifted it, I think, early last year, and there was of course a
ramp-up that was associated with that.
So, uh, understanding that the, you weren't hitting on
all cylinders, how many miles were replaced last
year, and approximately how many miles, point in time, are
you hoping would re- you'd replace this year in
2026?
Let me look at my little cheat code for 41 days in office.
So...
W- while he's looking, uh, Alderman Martin, what I can say is, um, we can get you
that. Um, we do file quarterly reports with the ICC, and we can certainly,
um, get you that. But we'll see if he's got it handy here.
Is the question 2026?
Yeah.
Right.
And the, and the rate filing.
Or last year, what was actually done, and this year what
the, what the goal is, understanding that might be a moving
target.
I've got from the people's gas testimony in the rate case the-
Okay
... uh, target for 2026 is 35 miles, and 2027, 53
miles. I believe it, the target was 6 for
2025 and 4 actual, uh, but I don't have that in front of me.
That's from memory. But the other two numbers, I, I was, uh, referencing a
spreadsheet I have.
Okay. So fair to say it'll, it'll be a number of years before you hit
what, over that 10-year period, would be the average.
So if we're talking about a little over, uh-A thousand
miles on average. I mean, I, I heard, uh, Chairwoman Hadden say maybe a
hundred fifty, a hundred thirty, uh, miles per year.
It's gonna be a few more years before you hit that average, right?
'Cause of that ramp up.
Yes.
Um, I wanna direct a few questions to Mr.
Garrige. So, um, I understand, I think you had
mentioned a little while ago, in 2018 you had
approximately 1,300 members. Now you're sitting at
approximately 982. Does that
sound about right?
Yes.
Would it be fair to say that the level of work that you
and your members are expected and projecting to do, it's
not gonna go down, it's gonna go up in the coming years?
It's not like in 2018 you had this high water mark and for
various reasons you're down here in terms of,
uh, uh, hours, uh, anticipated to
work.
So that's why we started data requests back in
February of 2025 to address the workload
need in the next, next couple years.
So we've been talking with the company for quite s- a year or so
ago, um, to say, "What are we gonna do to get more bodies so we can get people
ready to go for this project?" 'Cause we knew, you know, with the attrition rate
the way it was, we understood that this work is gonna be
tremendous. And
our, some of our, our fellow, um, union brothers and sisters
from the outside trades, they're gonna see a lot of this burden as well, because
people went to data centers, they went to other states. They go where the work is.
So we know, I think Peoples Gas knows, everybody knows
we need more bodies, and we've been given viable options, um, as
early as, as February of last year with data requests.
And we submitted a formal proposal in August of last year
saying, "Listen, this is what we could do to get more bodies.
We could train them up quicker. We could get them more on-the-job training
before some of those legacy bodies leave." Because now
what's hap- what we're seeing is a lot of the legacy, uh, people with all the
knowledge are getting poached to be contractors that are
working after they retire, working for Peoples Gas.
We would rather have them teach our guys on the inside before they
retire. And all of those things lead up to a more
robust workforce that could get this work done.
Yeah, I appreciate that, and I think that, you know, I, I, I
see
a ramp-up of work that's needed and obvious cost
considerations for people in terms of their pocketbooks, and wanting to make sure,
as, as Chairman Villegas mentioned, that collectively we're being as efficient as
possible. I appreciated his questions and look forward to the responses around
how from a city regulatory and permitting s- perspective we can
be more nimble without sacrificing, uh,
effectiveness of the work that's being done.
But also understanding short and long-term
consequences of incentives I think is important for
us, and would ask you all, um, you know, to share through the chair
some information in terms of what's been done recently and what can be
done moving forward with regard to incentives around not
just maintaining our, our current workforce, but expanding the
number. Because if there's a situation where there are hundreds of additional
outside contractors that are brought in, I'm not in the weeds, but some of
what's been shared earlier leaves me worried that, um, in the short
term that, that might be a necessity, but in the mid and long term, are we gonna
spend more money than is appropriate for people who aren't putting down roots in a
permanent way here in Chicago? Especially when you mentioned, sir, that
approximately 95% of the workforce is based in Chicago.
We wanna make sure that, uh, to the greatest extent possible, uh,
making sure it's, you know, legal, um, that those funds
get redirected back to Chicago, right?
We don't want people to just grab some money and then go run to another state.
Um, uh, this is a part of, I think, our broader economic vitality, and
we wanna be constructive partners to make sure that we're hiring
up in a sustainable way as that ramp is, is a quite
significant one.
And Alderman, as, as far as headcount goes, um, I'm gonna add to
my, to that question, obviously the question through the
chair, I'm gonna share with ch- uh, Alderman Hadden,
um, our headcount data as far back as we could
go. So that way you guys could see the trend of what was happening.
So I'll give you that data.
I appreciate that. Um,
wondering, switching gears a little bit to Peoples,
how are you assessing with these 1,000-plus miles, um, of
piping that needs to get replaced, where there are the most
acute safety risks, and how does that factor
into the broader determination that you're making in terms
of the sequencing of replacement?
Because on the one hand you could say geographically we're just gonna stay in these
small nodes, work through their, hopefully, th- you know, their efficiency is
to be gained. But I'm sure also that their expected, and unexpected to be
clear, safety risks that come up where you say, "Hey, based on these readings, uh,
based on complaints, we need to bump something to the top of the list."
So how are you looking at balancing that
need for maximizing efficiency while also
taking safety into account as you prioritize the sequencing of
the replacement across the thousand miles?
I think we may have touched on this prior to your arrival, but, um, we're
implementing the use of a JANA risk model for our prioritization.
But to your point, um, I think previous projects, um, there was some
prioritization by neighborhood.
Um, the JANA model, as Maria mentioned earlier,
um, accepted throughout our industry.
Um, it's a major data point in assisting us make
certain that we're replacing the riskiest pipe in our system.
Um, it's a risk-based prioritization of piping
systems, not neighborhoods. So that allows us to be
very confident as we prioritize to many different factors,
um, that that top 1%Um,
of our piping system at risk is replaced
as a result of these PRP projects. So you're correct.
It's JANA model, it's prioritization, it's conversations
with aldermen in different neighborhoods to make sure the magnets of the projects
in a neighborhood is not, um, too
overbearing. Some multiple factors, but the starting point
a JANA risk model for... based on our
entire piping system.
Thank you for r- um, sharing that again.
May I ask, with regard to reporting, how
often are you reporting out either directly to the ICC,
and my preference, you know, publicly or at least outside of that
process, um, what the JANA model is
spitting out in terms of, hey, on a quarterly basis, for example, or an annual
basis, here is what has been done. Here is what we are
preparing to do based on what the model is
suggesting.
I think I've seen our safety monitor and Sean every
week. I've been here for four weeks, so our reporting has been,
um, significant. Uh, that's one of the topics that has been
a focus of some of the discussion, what does the JANA model
represent? Um, so as far as timeframe or
frequency, we have weekly meetings with our safety monitor on different
topics. Um, JANA model is one of them, um, how we're using
that to prioritize future projects in 2026 and
2027. I'm hoping that's answering your question.
So the frequency-
In, in part, yeah.
Yeah.
So in terms of maybe the more public facing reporting.
So, um, at what point, and maybe it's not required currently by the ICC, are
you reporting out, hey, here's X number of, of
miles, approximate locations, um, that, that were done
based on the JANA recommendations and what's anticipated this
year, understanding that it's a point in time snapshot?
Uh, thank you, Alder. I'll take a, take a stab at that.
Um, I will note that my attorney's telling me we are at time, but, um, but with
that said, I, I think I mentioned, um, we do have quarterly reporting.
Uh, we are looking at adjusting the quarterly reporting that is public facing and
due to the ICC in terms of our performance and our
metrics. Um, and the reason I say we are...
we have asked the ICC to, to revisit that, the prior reporting was under the
prior iteration of the program, which included things beyond, you know, main and
included meter relocation. So we need to adjust that reporting.
But I would anticipate that depending upon how that, um,
ultimately is, um, uh,
framed for us by the ICC, that will hopefully, um, give
stakeholders, um, uh, an answer to, to that question in terms of
the, the public facing stuff. Um, in addition, I think I did mention earlier,
you might not have been here, that, um, the safety monitor is also required to
file, um, uh, reports on a regular cadence with the
ICC. Uh, that may be, I don't know what they're going to put
together, but that may be another opportunity, al- uh, Alderman, to, um,
uh, look at the way in which we have identified and
planned for that work.
Understood. Well, understanding that we're at time, I'll just have
one last through the chair request, um, 'cause I
think it's, it's a, a meatier one. I was hoping you could
share operational and financial lessons learned
from the system modernization program that are helping
inform the work that you're doing moving forward with
PRP.
And that's all I have right now. Thank you, Chair.
Thank you, Alderman Martin. Um, uh, just kind
of closing out. Uh, one, I wanna thank everyone for being here.
Um, thank you to the members. Thank you to our guests.
Um,
I- I'll say, you know, this was, this was our
first, um, time having People's Gas
before us to talk about kind of winter
preparedness, the rate case. Um, so we
appreciate you guys being willing to come.
Uh, thank you for working with our team and, um, I know we
had some scheduling things, and, uh, we're getting you out of here as close to
time as possible. Um, I'll say, um, we'll definitely
wanna debrief with you guys. As we get the through the chair requests, we'll make
sure to share those out with everyone, um, so that we can, uh,
move forward, get the information, and then of course continue,
uh, I think in our shared goals of just kind of keeping things open,
transparent, and, uh, making sure that we're serving our
constituents and giving you some feedback as well.
Um, with no further questions, this concludes the committee.
And, um, you know, can I get a motion to
adjourn? Alder Martin so moves. Hearing no objections so
ordered. Committee on the Environmental Protection and Energy is now
adjourned. Or did I... All
right.
Cool.
Out. Okay.