NGI The Weekly Gas Market Report
In response to suspension of the expansion of its natural gascustomer choice program by the Illinois Commerce Commission lastweek, Nicor Energy yesterday released a statement expressing itsconcern over the situation. The supplier also responded to negativeclaims made by the Citizens Utility Board (CUB), a non-profitutility watchdog group formed in Illinois in 1983.
“We’re extremely disappointed about the decision,” said KevinStoffer, CEO of Nicor Energy. “It’s Illinois consumers who willsuffer from this decision. We believe in choice for all customers,and this decision takes that opportunity away for customers innorthern Illinois,” Stoffer said.
Nicor Gas, the utility, currently allows all of its commercialcustomers and about 15% of its residential customers within itsservice area to participate in its Customer Select program. The ICCvoted last week to launch an investigation into the program, and tosuspend the company’s plans of widening the choice program to all ofits 1.9 million customers (see Daily GPI, Sept. 21).
Stoffer responded to the negative claims made by CUB. “Ourmarketing program has been forthright and thorough,” Stoffer said.”All complaints from our customers have been resolved. The fewproblems we’ve encountered have been addressed and always, ifcustomers were unhappy about their choice, we’ve released them fromtheir contract with no cancellation fee.”
Stoffer offered proof that Nicor Energy’s customers wereexperiencing better rates. “Our customers are reaping the rewardsof choice. About 40% of Nicor Energy customers are currently on afixed rate no higher than 35 cents a therm. With natural gas pricesanticipated to remain high through winter, customers who locked inthis price will likely have heating bills between 30 and 50% lowerthan their neighbors who decided to stay with Nicor Gas. Theremaining 60% of Nicor Energy’s customers are on a variable rate.These customers have saved money as well, although because of thevolatile nature of natural gas prices, there’s no guarantee thesecustomers will save money every month,” Stoffer said. “Customerswho selected Nicor Energy as their supplier during the program thisyear have saved almost 10% over the last five months. Their pricefor natural gas has been lower than the utility’s in four of thepast five months.”
Robert J. Kelter, director of litigation for CUB, responded,”The fact that they can throw out some statistics about somecustomers being locked in at 35 cents a therm; what about the othercustomers? We asked them point blank if customers were saving, andthey said, ‘we don’t know.'”
Kelter continued, “Nicor Energy is asking for customers to signup with a program that only the most sophisticated industrialcustomers could possibly know what is going on. There is just alack of information out there that would help customers understandhow the gas market works, what is happening with prices, and how tomake an informed choice.”
“I think the commission is going to do a thorough investigationof the program. If the customers are doing so well, then that willcome out in the context of the investigation,” Kelter said. “Thebottom line is, their solicitation gives customers the impressionthat they are virtually guaranteed to save 15%, when that isinaccurate. In the end, they just don’t address the issue thatpeople think they are signing up with the utility. Nicor doeseverything in their power to confuse customers about therelationship between Nicor Gas and Nicor Energy. They use the samename and logo, and they mark it in a way that gives people theimpression that they are staying with the utility.”
CUB expects that the commission will set the parameters for itsinvestigation within the next week or two.
“We hope the Illinois Commerce Commission will resolve anyoutstanding issues and will be able to put choice back into thehands of consumers,” Stoffer added.
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