Nicor Responds to Critics of Choice Program
In response to suspension of the expansion of its natural gas customer
choice program by the Illinois Commerce Commission two weeks ago, Nicor
Energy released a statement expressing its concern over the situation.
The supplier also responded to negative claims made by the Citizens Utility
Board (CUB), a non-profit utility watchdog group formed in Illinois in
"We're extremely disappointed about the decision," said Kevin
Stoffer, CEO of Nicor Energy. "It's Illinois consumers who will suffer
from this decision. We believe in choice for all customers, and this decision
takes that opportunity away for customers in northern Illinois," Stoffer
Nicor Gas, the utility, currently allows all of its commercial customers
and about 15% of its residential customers within its service area to participate
in its Customer Select program. The ICC voted last week to launch an investigation
into the program, and to suspend the company's plans of widening the choice
program to all of its 1.9 million customers (see NGI, Sept.
Stoffer responded to the negative claims made by CUB. "Our marketing
program has been forthright and thorough," Stoffer said. "All
complaints from our customers have been resolved. The few problems we've
encountered have been addressed and always, if customers were unhappy about
their choice, we've released them from their contract with no cancellation
Stoffer offered proof that Nicor Energy's customers were experiencing
better rates. "Our customers are reaping the rewards of choice. About
40% of Nicor Energy customers are currently on a fixed rate no higher than
35 cents a therm. With natural gas prices anticipated to remain high through
winter, customers who locked in this price will likely have heating bills
between 30 and 50% lower than their neighbors who decided to stay with
Nicor Gas. The remaining 60% of Nicor Energy's customers are on a variable
rate. These customers have saved money as well, although because of the
volatile nature of natural gas prices, there's no guarantee these customers
will save money every month," Stoffer said. "Customers who selected
Nicor Energy as their supplier during the program this year have saved
almost 10% over the last five months. Their price for natural gas has been
lower than the utility's in four of the past five months."
Robert J. Kelter, director of litigation for CUB, responded, "The
fact that they can throw out some statistics about some customers being
locked in at 35 cents a therm; what about the other customers? We asked
them point blank if customers were saving, and they said, 'we don't know.'"
Kelter continued, "Nicor Energy is asking for customers to sign
up with a program that only the most sophisticated industrial customers
could possibly know what is going on. There is just a lack of information
out there that would help customers understand how the gas market works,
what is happening with prices, and how to make an informed choice."
"I think the commission is going to do a thorough investigation
of the program. If the customers are doing so well, then that will come
out in the context of the investigation," Kelter said. "The bottom
line is, their solicitation gives customers the impression that they are
virtually guaranteed to save 15%, when that is inaccurate. In the end,
they just don't address the issue that people think they are signing up
with the utility. Nicor does everything in their power to confuse customers
about the relationship between Nicor Gas and Nicor Energy. They use the
same name and logo, and they mark it in a way that gives people the impression
that they are staying with the utility."
CUB expects that the commission will set the parameters for its investigation
within the next week or two.
"We hope the Illinois Commerce Commission will resolve any outstanding
issues and will be able to put choice back into the hands of consumers,"