Peoples Gas says rate change won't affect customers, but watchdog isn't so sure

CHICAGO (CBS) -- One of the largest utility companies in Chicago wants to change the way it does business.

Peoples Gas, which services hundreds of thousands of homes, has filed a rate-change request. The company says customers have nothing to worry about.

But as CBS 2's Andrew Ramos reported Friday, a watchdog committee is sounding the alarm.

A notice went out Friday from Peoples Gas in Chicago that services about 878,000 customers - informing them that the company has filed a historic proposal for a rate change. It is the first one in nine years.

They didn't call it a hike, though. In fact, in plain English it says, "Customer bills not expected to increase as part of the filing."

That one line did not sit well with some.

"Oh, I would say that Peoples Gas is being misleading," said Jim Chilsen, director of communications for the Citizens Utility Board. "I mean, this is a gut punch to consumers at the worst possible time."

The Citizens Utility Board, a watchdog group, called out Peoples Gas for not exactly being upfront about big changes headed to customers' bills.

"Peoples Gas is assuming that the commodity price - the supply price - is going to go down," Chilsen said. "There are no guarantees."

That assumption is a forecast based on global trends, which show the cost of natural gas on the decline, According to Peoples Gas, that decline will offset monthly bills when delivery prices go up an estimated 16 percent as part of the proposed hike.

"When you just look at delivery charges, we're talking about an increase of $140 over the year and delivery charges," Chilsen said.

Peoples Gas maintains that regardless of which direction the price of natural gas goes, the investment into infrastructure is necessary.

"We cannot play Russian roulette with your safety; with your health," said

Peoples Gas spokesman David Schwartz. "We're not banking on it. We are sharing the best knowledgeable information - and it may not pan out. But even if it doesn't - this is a very worthy investment in a system from the 1800s."

And that is the bottom line right there - it may not pan out, and if the forecast does not hold, it's going to hit many customers hard.

The Citizens Utility Board plans to fight the proposal by Peoples Gas. They're now urging those concerned about a possible hike to sign a petition on their website.