Nicor Gas said yesterday it has accepted the Illinois CommerceCommission’s (ICC) order for a performance-based rate (PBR) fornatural gas costs. Currently, the Naperville, IL-based distributorspends about $900 million a year to purchase gas, but the PBRprovides the financial incentive for it to buy gas at even lowerprices. Under the PBR formula, Nicor’s actual gas costs will becompared to a targeted benchmark that’s based on competitive marketprices. The difference between the actual gas costs and thebenchmark will be shared 50/50 between Nicor Gas and its customers.The PBR plan, which will go into effect Jan. 1, will not apply totransportation customers who purchase their own supplies from thirdparties.

Consumers Energy has reached an agreement with a broad coalitionof customers, other utilities and independent power producers tosupport legislation that would provide choice to Michigan electriccustomers by January 2002, ensure full recovery of stranded utilitycosts, and provide a three-year rate freeze for customers who staywith their utility. These have been proposed by state Sen. MatDunaskiss in recently released draft legislation, which is expectedto be taken up by the Michigan Legislature in the first quarter ofnext year. In addition to Consumers Energy, the Dunaskiss draft issupported by the Michigan Chamber of Commerce, the MichiganManufacturers Association, Citizens for Power & Reliability,and the group ABATE, which represents industrial and commercialcustomers.

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