Nicor Gas of Naperville, IL, received approval from the IllinoisCommerce Commission (ICC) for a performance-based rate (PBR) planfor gas costs. The company filed the original proposal with the ICCMarch 2, and, with some changes, the ICC approved the plan. NicorGas has 14 days to accept or reject the modified plan. During anine-month review process, testimony was presented by interestedparties including the ICC staff, the Citizens Utility Board and theCook County States Attorney’s office.

“We filed the PBR in response to Illinois legislation passed in1997 to encourage utilities to take advantage of the changingenergy industry and use alternatives to traditional rateregulation,” said Nicor CEO Tom Fisher. “While Nicor Gas has along-standing record for keeping natural gas costs for itscustomers among the lowest in the nation, the performance-basedrate plan establishes economic incentives for the company to reducethose costs even further. During the next two weeks we willdetermine if the ICC’s changes to our originally filed plan areacceptable.”

Nicor’s $900 million annual gas costs are passed on to customerswithout markup. Under the PBR plan, the company’s actual gas costswould be compared to a market-based benchmark. The differencebetween actual gas costs and the benchmark would then be sharedbetween Nicor and customers. Transportation customers who are notcharged any gas costs would not be affected by the PBR plan. IfNicor Gas accepts the order for the performance-based rate plan, itwill take effect Jan. 1. The ICC will review results after twoyears.

Nicor Gas serves more than 1.9 million customers in a serviceterritory that encompasses most of the northern third of Illinois,excluding the city of Chicago.

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