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IL Watchdog: $18M Settlement a 'Warning to All Utilities'

An $18.5 million settlement with Peoples Gas over misleading statements is earning praise from an Illinois consumer watchdog. (iStockphoto)
An $18.5 million settlement with Peoples Gas over misleading statements is earning praise from an Illinois consumer watchdog. (iStockphoto)
May 12, 2016

Springfield, IL - One of Illinois' largest gas providers is on the hook for more than $18 million over misleading statements about the costs of upgrading its aging pipe system. This comes after the former owners of Peoples Gas admitted to deceiving customers and state investigators. The company originally claimed the program would cost about $4.5 billion, while the actual cost was closer to double that amount.

Jim Chilsen with the watchdog Citizens Utility Board said Peoples Gas used the deceptive practice to get state regulators to approve a merger with the gas companies current owners.

"We're hoping that this settlement, which totals about $18.5 million, that this is a warning to all utility companies; if you mislead state regulators, you're going to pay for it," he said.

In a statement however, the gas company's new owners, WEC Energy Group, did not acknowledge any wrongdoing, but merely said it was focused on upgrading Chicago's natural gas infrastructure.

The settlement comes after Illinois Attorney General Lisa Madigan and the Citizens Utility Board filed false claims petitions with state investigators. Chilsen said Peoples Gas' customers already are paying some of the highest rates in the Midwest.

"So, the big question is, are the new owners of Peoples Gas, WEC Energy Group, ready to get down to the business of fixing this pipe replacement program, because it's been an absolute disaster for consumers," he said.

The companies are set to pay out $10 million in refunds to gas customers. An additional $1 million will be paid to reconnect low-income customers whose service was recently shut off.

Brandon Campbell/Shaine Smith, Public News Service - IL