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CUB Triggers Investigation of Nicor Utility Affiliate

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.

Alex Steis

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