Plan for Aging Natural Gas Pipelines in Chicago Under Scrutiny
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The city of Chicago has a massive problem on its hands – its huge network of aging natural gas pipelines is degrading rapidly. The system, which provides gas service to approximately 900k households, is one of the oldest in the U.S. Incredibly, some of these pipes are 200 years old! And it shows; many of the pipes leak methane like a sieve.
The good news is that the city’s gas utility, Peoples Gas Light and Coke Company (PGL), announced a plan in 2024 to get the necessary upgrades completed. Unfortunately, some organizations, such as the Illinois Citizens Utility Board (CUB), a nonprofit utility watchdog established by the state legislature, do not agree with PGL’s plan.
How PGL Intends to Upgrade the City’s Aging Natural Gas Pipelines
PGL wants a full reset. Specifically, the utility’s plan involves running new, upgraded plastic pipelines throughout the city, leaving the old iron pipes in the ground. Seems reasonable, albeit highly ambitious. Simply put, something must be done because the leaks are likely to be creating health issues for residents, and they certainly aren’t helping from a climate change perspective.
However, the CUB published a report in Oct. 2024 criticizing PGL’s plan, claiming that gas rates would substantially increase because the cost of executing the plan would far exceed PGL’s estimates (to the tune of an additional $5 billion!). In fact, the CUB estimates that it could cause rates to double by the year 2040.
Additionally, the CUB report (entitled, “People’s Gas: Escalating Business Risk in a Changing Energy Landscape”) questions the validity of making such a massive investment in an infrastructure that may be less important in the future due to the advancement of electrification. The concern is that if the demand for gas bottoms out, it would result in stranded assets.
This situation is a microcosm of what many gas utilities across the country are facing. Many of them are struggling with what to do about their aging natural gas pipelines. I’m not sure what the solution is, but I sure hope the situation improves because if not, overall reliability in the natural gas sector could take a massive hit soon.
