City questions rising cost of heat, demands oversight for Peoples Gas

Chicagoans are paying a lot more for heat than their suburban neighbors, and a City Council committee questioned Peoples Gas on the increases during a long-delayed hearing on Wednesday.

A resolution sponsored by Alderman George Cardenas who leads the Committee on Health and Environmental Protection asked Gov. J.B. Pritzker and the state to address the affordability problems and increase oversight on the utility company. It was approved and will likely go before the full City Council next month.

Peoples Gas has hiked prices based on ever-rising cost of its pipeline modernization project. However, the city doesn’t think the rate of pipeline replacement correlates with the dramatic increases in spending. Both Nicor and Peoples have extensive pipeline projects, but Chicagoans still end up paying more. The committee deemed the high prices as “fraudulent” and an unsustainable “burden to Chicagoans.”

Ald. Cardenas called for the hearing after a Crain’s report in July that showed Chicago households served by People’s Gas paid 80 percent more than their suburban counterparts served by Nicor Gas. The higher cost comes from the delivery, taxes, and other charges not the price of fuel which is the lowest it’s been in nine years, according to city documents and Crain’s.

Currently, there is also state legislation pending that would restrict the company’s ability to add a surcharge to cover the cost of the improvements.