Illinois' Citizens Utility Board (CUB) filed a class action lawsuit in Cook County Circuit Court on Thursday alleging that Nicor Services, an affiliate of Chicago utility Nicor Gas, knowingly markets a gas pipeline repair plan, known as Comfort Guard, to customers who don't need it and adds it to customers' bills without their consent.
CUB and the Cook County State's Attorney also filed a motion Thursday at the Illinois Commerce Commission (ICC) arguing that a rate increase requested by Nicor Gas should be reduced by an amount equal to the $20 million in revenues the utility earned from the Comfort Guard program. CUB and the State's Attorney have asked to file additional expert testimony in the pending Nicor Gas rate case that they said shows consumers pay most of the costs of marketing and selling the program, but do not benefit from the profits the company earns on it.
At a cost of $3.95 a month for Comfort Guard, the energy services affiliate promises to repair leaks to "your home's exposed interior gas lines and connectors." All repairs, according to a Nicor bill insert, are performed by a "certified Nicor technician."
While Comfort Guard solicitation materials state that the product comes from Nicor Services, utility affiliate Nicor Gas actually sells the program, and Nicor Gas technicians provide the services under the program. The utility also bills customers for the program.
"Nicor Gas customers are paying the vast majority of the costs associated with marketing, selling, and providing the Comfort Guard service," CUB Executive Director Martin R. Cohen said. "It's only fair that customers should be benefiting, in the form of lower rates, from the profits the program generates."
According to CUB, as of last summer, the company had sold Comfort Guard to more than 348,000 customers. Subscribers to the program are locked into a 12-month contract that automatically renews each year unless the customer cancels within 30 days of the expiration date.
Meanwhile, in November, Nicor Gas asked the ICC to approve an $83 million rate hike, that would boost the average customer's bill by about $26 a year. CUB is arguing that the rate hike is unjustified and that consumers deserve a small rate cut instead. That rate cut would be even larger if the revenues from the Comfort Guard program are included.
The class action lawsuit seeks damages for all Nicor Gas customers who have had Comfort Guard added to their accounts without their consent and all Nicor Gas customers who have purchased Comfort Guard under the false belief that it provides them some benefit.
CUB is a nonprofit statewide utility watchdog organization created by the state legislature to represent the interests of residential and small-business utility customers.
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