Peoples Gas is asking Illinois regulators to approve a $202.3 million rate increase — a request that Chicago residents and consumer advocates are challenging on the grounds that the utility has repeatedly missed deadlines and overspent on the very infrastructure program the hike is meant to fund.
The rate hike request, filed in January 2026, arrived before the Chicago City Council’s Committee on Environmental Protection and Energy in early March, where aldermen heard directly from consumer watchdogs, neighborhood advocates, and company representatives. The Illinois Commerce Commission will rule later this year on the gas company’s request to raise gas rates by an average of around $11 a month per customer, or about $130 per year. If approved, the new delivery rates would go into effect starting in 2027.
What Peoples Gas Says
The company’s position is straightforward: it needs more revenue to complete state-mandated infrastructure work. Peoples Gas said higher rates are needed to meet the Illinois Commerce Commission’s requirement to retire more than 1,000 miles of old iron pipes in Chicago’s heating system by January 1, 2035. “The pipes are nearing the end of their useful lives, so the work is critical for ongoing safety and reliability in the system,” a Peoples Gas statement said. “This is large-scale, complicated construction, and the ICC set an accelerated deadline for completing it.”
At the City Council hearing, Peoples Gas President Maria Bocanegra told the committee the increase is needed to complete a state mandate to replace aging pipes, as well as offset higher operating costs from inflation. She said the company is partnering with the city clerk’s office to help people find discounts for their bills, and is working to start a pilot for greener geothermal energy in the city.
A Record of Overruns and Delays
Consumer advocates and aldermen pointed to a pattern that predates this rate case. Pipe replacement originally had been expected to cost less than $2 billion, with more than 2,000 miles of aging underground pipes replaced by 2030. Instead, as of last year, it had already cost more than $3.3 billion, with only about 1,000 miles of pipe replaced. Replacing the remaining 1,000 miles is now projected to take until 2035, with no updated cost estimate available.
Before the latest rate-hike request, Peoples Gas raised rates by $499 million, or 98 percent, since 2011 — including the state-record $306 million gas hike in 2023. That context drew pointed questions from aldermen during the committee hearing.
Ald. Leni Manaa-Hoppenworth (48th) noted that the company has posted record profits while some of her constituents struggle to pay their gas bills. Peoples Gas’ parent company, WEC Energy Group, reported $1.6 billion in profits in 2025, up from $1.5 billion the year prior, after the company saw revenue grow to nearly $10 billion.
Compounding the affordability concern is the scale of existing customer debt. More than 145,000 Chicago households were at least 30 days behind on their gas bill in January, totaling nearly $10 million. In recent years, about one in five Peoples Gas customers have chronically struggled to afford their heating bills. In February, their accumulated debt totaled nearly $90 million. In some neighborhoods, 30 to 50 percent of homes were more than 30 days behind on their bills.
The Pace Problem
A core issue raised by consumer groups is whether Peoples Gas can realistically deliver the work it is asking ratepayers to finance. Illinois PIRG director Abe Scarr pointed out that the company needs to replace 100 miles of pipe per year to stay on track, but historically completes only 60 miles annually.
Peoples Gas has spent an average of $265 million per year on pipe replacement in recent years. It is now planning to spend more than twice that — around $535 million per year from 2028 through 2034. Consumer advocates argue that pace is not historically achievable.
The Alternative: Pipe Liners and Electrification
Rather than full replacement, some advocates are urging a shift toward pipe lining — a technique that inserts a durable liner into existing pipes to extend their lifespan and eliminate leaks at lower cost. “You can insert a liner into the pipe, and that can extend the life of the pipe for a hundred years, eliminate leaks and drastically reduce the risk of failure, all while costing less for Chicagoans,” Illinois PIRG Director Abe Scarr said at a January demonstration outside City Hall.
The Illinois Commerce Commission held eight public workshops last fall to discuss the feasibility of non-pipeline alternatives. Illinois PIRG said it found the workshops valuable but that they “stopped short of advancing actionable outcomes,” largely because Peoples Gas had not hired a consultant to assist in analyzing alternatives, including system electrification and pipe liners.
What Comes Next
The Illinois Commerce Commission is the decision-making body on this request — City Council has no formal vote. The ICC is expected to rule on the request in November 2026. In the interim, advocates are urging ratepayers to submit public comments to the ICC and attend commission meetings.
Over 100 demonstrators gathered at Daley Plaza on April 1, 2026, chanting “Rate hike? No! Record profits? No!” U.S. Rep. Mike Quigley joined the protest, and community groups including the Citizens Utility Board and Illinois PIRG have vowed to submit expert testimony challenging the company’s cost projections throughout the ICC review period.
For Chicago households still climbing out of winter heating debt, the outcome of this regulatory proceeding carries direct financial consequences. If the ICC approves the full request, the average Peoples Gas customer would see roughly $130 added to their annual bill — on top of the near-doubling of rates the utility has already imposed over the past 15 years.
