Integrys Energy : Letter to the editor of Crain's Chicago Business - March 26, 2015

For Release: 03/27/2015

Underneath the streets of Chicago run more than 4,000 miles of pipes carrying natural gas. It heats Chicagoans' homes and powers their household appliances. But much of the pipe is old-some of it from the 1800s-and must be replaced.

Peoples Gas' Accelerated Main Replacement Program is one of the largest natural gas infrastructure modernization programs in the country and it puts Chicago ahead of other cities in proactively addressing aging infrastructure. Since 2011, we have installed over 575 miles of pipe while creating 1,000 jobs for Chicago.

To be sure, the AMRP has faced challenges, perhaps not surprising for a construction project of this scope. Whether because of important safety enhancements, new reporting requirements or changes in Chicago Department of Transportation procedures, change has been the rule rather than the exception. In an effort to make sure the program is running properly, we conduct regular audits and inspections of the work to ensure that the company is delivering good quality for our customers.

Our goal is to have a world-class construction project to build a world-class infrastructure. That's why there is always room for improvement and why we're implementing the changes recommended by Illinois Commerce Commission auditors. Even prior to this audit, we hired an independent auditing firm to evaluate the project. And we expect to be constantly evaluating and improving our performance until the last piece of pipe is replaced.

The Illinois Natural Gas Consumer, Safety and Reliability Act allows for rate increases to pay for the AMRP project. The average base rate increase for delivery service allowed under that act is capped at an average of 4 percent per year, or less than 50 percent of the current base rate amount over the 10-year legislation time frame, not the more than doubling of base rates reported. For an average customer's total gas bill, including gas costs and other charges, the percentage increase is even less. The ICC will conduct an annual proceeding to review the previous year's AMRP work.

The natural gas industry is evolving, and Peoples Gas has been a leader in the structural changes sweeping through the industry. Since 2007, when Integrys Energy Group was formed following the merger of Peoples Energy and WPS Resources, our commitment to Chicago has increased. We have committed to training veterans as gas utility workers at City Colleges of Chicago and hired over 100 graduates so far. We invested $15 million in Illinois' first pilot gas energy-efficiency program. And by the end of this year, Peoples will have refunded nearly $50 million to customers via a regulatory mechanism created to ensure a fairer balance between weather fluctuations and energy efficiency.

We take our responsibility as Chicago's natural gas utility very seriously and will continue to do so following the merger with Wisconsin Energy. The AMRP will make our system even safer and more reliable for generations to come.

Our employees work very hard 24/7 to make sure our system remains safe and reliable. The Integrys leadership team and I have confidence in the direction Peoples Gas is going and the leaders who are guiding that work.