CUB Triggers Investigation of Nicor Utility Affiliate
The Citizens Utility Board (CUB) scored two wins last week as
the Illinois Commerce Commission (ICC) voted to begin an
investigation into Nicor Gas' gas deregulation program and
temporarily blocked a proposed expansion of the program until the
company can prove it benefits customers.
The program which is under scrutiny is Nicor's Customer Select
plan, which currently allows all commercial customers and 15% of
the residential customers in the company's service area to choose
their own suppliers for natural gas. Nicor wants to expand the
program to all of its 1.9 million customers early next year.
"We had some concerns with the way the pilot [program] was
structured," said Robert J. Kelter, director of litigation for CUB.
"Nicor Energy got 71% of the customers overall, but of the
residential customers they got over 90%. We think the reason they
dominated is because they portray themselves as though Nicor Energy
is Nicor the utility. Small businesses and residential customers
feel a certain level of comfort and protection if they choose a
company that they think is the utility," Kelter explained.
The commission voted four-to-one on Wednesday to issue a
suspension order on the proposed rate sheets pertaining to the
expansion for a period of 105 days, pending an investigation into
Nicor's Customer Select program. Commissioner Ruth Kretschmer was
the dissenting vote. The ICC agreed to look into complaints
customers have had with the program over the last two years.
Misleading advertising by Nicor Energy and a broken agreement by
another marketer Santana Gas are at the top of the list of
complaints according to the CUB.
Kelter said, "It's now up to Nicor to prove that this plan is
more than just a marketing exercise designed to shift customers to
its unregulated affiliate."
Kelter believes in order to make the Customer Select program
work the commission has to give itself authority to regulate the
service providers, implement affiliate rules, which he noted is
already in the works, and educate the customers. "We are hoping
they do those things before they expand the pilot," said Kelter.
ICC spokesperson Beth Bosch said she believes the commission
intends to finish the investigation if possible before the date of
Nicor's proposed expansion early next year.
"Essentially, what I think is happening is some of the
commissioners, one in particular did not feel like he had enough
information on the market share of Nicor Energy in the market and
was uneasy about expanding this program to additional customers
without knowing whether any other marketers have access," Bosch
said. "The staff's recommendation was to allow the program to
continue but to do an investigation because the staff also has some
questions about it."
CUB is a non-profit utility watchdog that was formed in 1983 in
Illinois to represent the interests of residential and small
business utility customers in proceedings before the ICC, courts
and the state legislature.
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