Peoples Gas cuts proposed rate hike by $58 million, but watchdogs say it's not enough

Peoples Gas submitted a new proposed rate hike to the state of Illinois that slashed 30%, or about $58 million, from their original proposal, but watchdog groups say that's still not enough.

Peoples Gas previously proposed a $202 million rate hike, claiming it's needed to replace aging infrastructure in the state. Last year the Illinois Commerce Commission ordered the natural gas utility to retire about 1,000 miles of iron pipes by the end of 2034.

Watchdog group Citizens Utility Board and Illinois Public Interest Research Group  have both decried the rate hike, saying it contains hidden changes including bonuses for corporate executives, inflated profit margins and wasteful spending on the failing pipe retirement program.

Peoples Gas estimated their original rate hike would have raised the average household's monthly bills $10-$11. They said this new proposal would only raise household bills $7-$8 a month, according to CUB.

But CUB and PIRG have argued the rate hike would put too much of a burden on households, and that there are viable alternative replacement plans that could save customers $2 billion.

The rate hike proposal has faced scrutiny and criticism since the beginning of the year. In January, watchdog groups called it a cash grab, pointing out that Peoples has aggressively increased rates over the last 10 years and has taken in record profits.

Even the Chicago City Council has questioned the utility, calling it "excessive' In March.

CBS News Chicago reached out to Peoples Gas for comment and have not yet heard back.