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CUB Triggers Investigation of Nicor Utility Affiliate
The Citizens Utility Board (CUB) scored two wins last week asthe Illinois Commerce Commission (ICC) voted to begin aninvestigation into Nicor Gas’ gas deregulation program andtemporarily blocked a proposed expansion of the program until thecompany can prove it benefits customers.
The program which is under scrutiny is Nicor’s Customer Selectplan, which currently allows all commercial customers and 15% ofthe residential customers in the company’s service area to choosetheir own suppliers for natural gas. Nicor wants to expand theprogram to all of its 1.9 million customers early next year.
“We had some concerns with the way the pilot [program] wasstructured,” said Robert J. Kelter, director of litigation for CUB.”Nicor Energy got 71% of the customers overall, but of theresidential customers they got over 90%. We think the reason theydominated is because they portray themselves as though Nicor Energyis Nicor the utility. Small businesses and residential customersfeel a certain level of comfort and protection if they choose acompany that they think is the utility,” Kelter explained.
The commission voted four-to-one on Wednesday to issue asuspension order on the proposed rate sheets pertaining to theexpansion for a period of 105 days, pending an investigation intoNicor’s Customer Select program. Commissioner Ruth Kretschmer wasthe dissenting vote. The ICC agreed to look into complaintscustomers have had with the program over the last two years.Misleading advertising by Nicor Energy and a broken agreement byanother marketer Santana Gas are at the top of the list ofcomplaints according to the CUB.
Kelter said, “It’s now up to Nicor to prove that this plan ismore than just a marketing exercise designed to shift customers toits unregulated affiliate.”
Kelter believes in order to make the Customer Select programwork the commission has to give itself authority to regulate theservice providers, implement affiliate rules, which he noted isalready in the works, and educate the customers. “We are hopingthey do those things before they expand the pilot,” said Kelter.
ICC spokesperson Beth Bosch said she believes the commissionintends to finish the investigation if possible before the date ofNicor’s proposed expansion early next year.
“Essentially, what I think is happening is some of thecommissioners, one in particular did not feel like he had enoughinformation on the market share of Nicor Energy in the market andwas uneasy about expanding this program to additional customerswithout knowing whether any other marketers have access,” Boschsaid. “The staff’s recommendation was to allow the program tocontinue but to do an investigation because the staff also has somequestions about it.”
CUB is a non-profit utility watchdog that was formed in 1983 inIllinois to represent the interests of residential and smallbusiness utility customers in proceedings before the ICC, courtsand the state legislature.
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