Peoples Gas seeks $202 million rate increase as aging pipes are replaced, raising questions about affordability alternatives.
As monthly utility bills climb, many Chicago residents say they are feeling pressed on all sides.
This year, major providers including Peoples Gas, Nicor Gas and Illinois American Water have filed rate increase requests that could further raise the cost of essential services. Peoples Gas alone is seeking $202 million from the Illinois Commerce Commission (ICC), according to filings with the state regulator. This move would increase the average residential gas bill by about $10 to $11 per month beginning in 2027 if approved.
This comes after the ICC approved a $303 million rate hike for Peoples Gas in November 2023, the largest in Illinois history.
For residents already juggling rent, groceries and transportation costs, even a modest increase can matter.
Jina Glasgow, a Logan Square restaurant host who receives food assistance through the Supplemental Nutrition Assistance Program (SNAP), says rising bills are becoming unmanageable.
“Even with electric, I feel like the bills have been getting higher and higher every single month,” Glasgow said. “I can’t even afford the groceries sometimes, I gotta focus all my money on these gas bills.”
Both the 2023 and 2026 requested increases from Peoples Gas are tied to their long-running effort to replace thousands of miles of aging gas mains, as mandated by the ICC. Some are more than a century old.
The push to modernize pipelines accelerated nationwide after a 2010 explosion in San Bruno, California, that killed eight people and destroyed dozens of homes. Federal regulators urged utilities to replace outdated pipes made of materials prone to leaks and corrosion.
In Chicago, that effort evolved into what is now called the Pipe Retirement Program (PRP). Over time, the massive infrastructure project has changed names and leadership, while costs have grown significantly and the timeline has stretched beyond early projections.
Peoples Gas has said the program is essential to ensure safety and reliability.
“Peoples Gas is committed to using every dollar approved by state regulators on heating homes and businesses, and making safety and reliability an ongoing certainty across every Chicago neighborhood,” Peoples Gas President Maria Bocanegra said in a January statement.
The company’s approach to funding this infrastructure has drawn criticism from consumer advocates, who say that even though funding mechanisms have changed, the costs of upgrading pipes ultimately fall on residents and contribute to rising bills.
Jim Chilsen, the communications director for the Citizens Utility Board, says the proposed increase reflects a pattern.
“This would be an extreme hardship for customers,” Chilsen said. “Customers are already reeling from high gas bills because of Peoples Gas’s spending over the last decade. We have large sections of Chicago that are in a heating affordability crisis.”
Chilsen said delivery charges, which cover infrastructure costs and include a profit component, appear on customer bills regardless of gas usage, meaning all residents share the cost.
These charges have nearly doubled since 2011. Meanwhile, he said, Peoples Gas has posted record earnings in seven of the last eight years.
“At the same time that the company talks about the need to maintain this system, they conveniently leave out the profit motive,” he said. “Everyone on the planet agrees that they need to maintain their systems, but again, they should not do it by bankrupting their customers.”
The supply side of the bill is also rising, driven by a volatile market, according to Chilsen. “Customers are getting hit with a double whammy,” he said.
Matt Schrotenboer, a high school chemistry teacher and Albany Park resident, said the utility’s monopoly limits alternatives and accountability for customers.
“Peoples Gas is very notorious for doing things to their advantage and not for those that they’re serving,” Schrotenboer said. “Whatever they do, people have no other option. It’s either go through them or freeze,” the 28-year-old added. “And so because they know they have that power, they can do things to make money.”
Under Illinois law, regulated utilities are permitted to earn a set return on approved investments, such as infrastructure upgrades. Chilsen says that structure creates an incentive to spend more.
“Peoples Gas is gunning for a profit rate for their shareholders of over 10 percent. That’s absolutely excessive,” he said. “That’s the kind of thing we look for in these cases is to bring down that profit rate for shareholders and to weed out wasteful spending.”
Dr. Euan Hague, a professor of geography and GIS at DePaul University who oversees the certificate in energy management and policy, said consumers need greater clarity about how Peoples Gas determines its infrastructure spending budget.
“I certainly don’t want to accuse Peoples Gas, but I believe what we’re seeing is a blurring of their accounting. When does provision of a public good and public infrastructure become more of a private, profit-making entity?” Hague said.
Advocates also question whether the work is being done in the most cost-effective way.
Matthew Docalovich, a field organizer for Illinois Public Interest Research Group (PIRG), said independent investigations have found the company is not prioritizing its highest-risk pipes.
A separate Illinois Commerce Commission investigation concluded in 2025 found similar issues. Regulators said Peoples Gas had not adequately focused on its highest-risk pipes and
ordered the utility to complete those replacements by 2035, with annual independent safety monitoring and stricter oversight of future spending. The utility must provide highly detailed quarterly reports so regulators can verify the work being performed and assess the underlying costs.
Docalovich pointed to pipe “relining” as a potentially more cost-effective alternative to full replacement that could improve safety while minimizing disruption to streets and sidewalks.
David Schwartz, a spokesperson for Peoples Gas, said the company is exploring these alternatives, but notes regulatory limits.
“We’re analyzing project locations to determine if non-pipeline alternatives and lining technology are logistically workable and cost effective,” Schwartz said. “Regulatory clarity is needed on whether extending the life of pipes is in compliance with the ICC’s order and whether current regulatory and accounting frameworks treat relining as retirement.”
The debate over rising utility bills and costly infrastructure comes amid broader questions about the city’s long-term energy future. Gov. JB Pritzker has set a goal of 100 percent clean energy by 2050 under the Climate and Equitable Jobs Act, aiming to wean the city off fossil fuels. Some advocates say continued investment in natural gas conflicts with those goals.
“We need to stop digging ourselves into this hole of fossil fuels before we can start climbing our way out of it towards clean energy,” Docalovich, the PIRG representative, said. “And all of this spending on natural gas is not going to help us do that.”
Hague echoed these concerns: “You really wonder if this is worth investing in,” he said. “We’re still not giving it the importance it perhaps merits as we go forward as a society.”
Schrotenboer also highlighted the challenge of balancing environmental goals with public safety.
“We should have good pipes. But is this the best use of it? Is it heading in the same direction we want to go?” he asked. “It’s a very unique balance, keeping our environment protected and keeping our people safe.”
Schwartz defends the utility’s approach: “We believe all energy sources are needed to safely and reliably meet the needs of Chicagoans and the regional economy,” he said. “We also believe Chicagoans should be able to choose which energy source they rely on.”
With respect to infrastructure costs and profit rates, Schwartz notes that both private and public utilities in the U.S. ultimately pass these expenses on to customers.
“We’re requesting a Return on Equity (ROE) of 10.1 percent, if approved. This ROE is lower than similar requests recently made by other natural gas utilities in Illinois and is supported by the current level of interest rates and market conditions,” Schwartz said. “If critical infrastructure work was not funded by customers who use the service, the work could not be done, the infrastructure would fail, public safety and countless jobs would be lost and the economy would be crippled.”
Docalovich offered recommendations for steps residents can take to reduce their reliance on fossil fuels and lower gas bills. Measures include weatherizing homes, replacing gas appliances such as stoves and water heaters, and exploring alternative heating systems like heat pumps.
Chicago residents also have the ability to influence the outcome of the current rate case. Those who can take direct action may begin slowly reducing fossil fuel use and adopting renewable energy lifestyles. Others can join consumer advocacy groups and voice concerns at public meetings.
Ultimately, the debate reflects a broader challenge: balancing the need for reliable energy with affordability, public safety and environmental goals.
As Schrotenboer puts it: “We need gas. We need energy. But that doesn’t mean the system should work against the customer.”
Header Image by Annie Price
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