Madigan reaches $18.5 million settlement with Peoples Gas

Attorney General Lisa Madigan announced Tuesday two settlements totaling $18.5 million with Peoples Gas Light and Coke Company and its former parent company Integrys Energy Group, and current owner WEC Energy Group, for misleading consumers about the cost of its Accelerated Main Replacement Program.

Madigan and the Citizens Utility Board filed petitions last year with the Illinois Commerce Commission against Peoples Gas after an audit report found the energy company’s main replacement program would cost consumers $8 billion, according to a statement from Madigan’s office.

In 2009, the ICC approved Peoples Gas’ proposal to replace 2,000 miles of aging gas mains in Chicago, according to a statement from CUB.

Peoples Gas now admits that its executives withheld the estimated cost from the ICC in a 2015 hearing concerning its merger with WEC, Madigan’s office said. The Chicago Sun-Times previously reported that executives repeatedly told commissioners at the hearing that they had no projections on the costs of replacing gas mains in Chicago beyond a publicly announced estimate of $4.5 billion, Madigan’s office said.

For the first settlement totaling $11 million, the energy companies agreed to pay $10 million to Peoples’ customers and $1 million to reconnect low-income customers whose service was shut off and to forgive their outstanding debt, Madigan’s office said. For the second settlement totaling $7.5 million, the energy companies agreed to pay $4.5 million to the state of Illinois and $3 million to Peoples’ “Share the Warmth” fund, which provides heating grants to limited and fixed-income households.

Both settlements are subject to the ICC’s approval, and consumer refunds will begin no more than 90 days after their approval, Madigan’s office said.

Madigan and the CUB will continue to request that the ICC restructure and start over the AMRP, Madigan’s office said.

“I will continue to fight to overhaul the program, which still threatens the affordability of Peoples’ Gas service,” Madigan said in the statement. “Peoples Gas’ customers already pay some of the highest utility rates in the Midwest, and they should not bear the burden of an unjustified and overpriced program.”