Peoples Gas, North Shore Gas settle with state for $125 million for raising prices for 'ineligible' projects
Peoples Gas and North Shore Gas have reached a settlement with Attorney General Kwame Raoul that’s expected to allow more than a million utility customers to share $125 million in bill credits, according to Raoul’s office.
The settlement stems from monthly charges the companies levied from 2017 through 2023 — the Qualified Infrastructure Plant surcharge and the Uncollectible Expense Adjustment riders. The state argued the money collected from both charges was spent on ineligible expenses, including capital work, expired permits and "unsubstantiated change orders."
Meanwhile, customer complaints increased as their bills skyrocketed over the last decade, with the companies’ blaming their costly, state-mandated Accelerated Main Replacement Program.
Last year regulators ordered the utility to overhaul its that controversial pipeline replacement program, which is over budget and behind schedule.
Originally, it had been expected to cost under $2 billion and replace more than 2,000 miles of aging underground pipes by 2030. Instead, at the halfway mark last year it already had cost more than $3.3 billion. Replacing the remaining 1,000 miles of particularly leak-prone pipe now is projected to take until 2035, with no updated cost estimate available.
The settlement, which still requires approval from the Illinois Commerce Commission, would give affected customers an estimated bill credit of $50 in 2026, $40 in 2027 and $40 in 2028.
“The settlements announced today will directly benefit natural gas customers of both Peoples Gas and North Shore,” Raoul said. “My office’s Public Utilities Bureau will continue to fight to ensure all customers are paying fair and reasonable rates for their utilities.”
In a statement, a representative for Peoples Gas and North Shore Gas maintained the settlement was unrelated to the pipe replacement program, and said it would "allow us to focus on the important job of serving Chicagoans with reliable and safe energy."
The agreement also saw the company cut $130 million in capital costs, estimated to save customers over $350 million over several years, according to Raoul’s office.
The settlement will require Peoples Gas to competitively bid contracts larger than $25,000, document and approve cost changes in excess of $5,000 and provide closeout information when a project is completed.
Despite the settlement, Peoples Gas has remained committed to pushing through a $202 million rate hike, again putting the blame on the pipe replacement project — though it was blasted by city residents at a City Council Committee on Environmental Protection and Energy subject matter hearing in March.
Still, it will be up to the Illinois Commerce Commission to 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. A hearing on the matter is slated for 1 p.m. Tuesday.
Peoples Gas’ parent company, WEC Energy Group, reported $1.6 billion in profits in 2025, up from $1.5 billion the year prior. That’s after the company saw revenue grow eightfold, to nearly $10 billion, between 2024 and 2025.
According to the Illinois Commerce Commission, more than 145,000 Chicago households were at least 30 days behind on their gas bill in January — totaling nearly $10 million.
“These bill credits are good news for Peoples Gas customers who have suffered so much financial pain because of the utility’s wasteful spending,” said Sarah Moskowitz, executive director of the Citizens Utility Board. “We look forward to continuing the important work ahead to hold Peoples Gas accountable and seek justice for its long-suffering customers.”