Nicor Gas has filed a performance-based rate proposal with theIllinois Commerce Commission that would allow the company and itscustomers to save money if Nicor’s commodity, transportation andstorage costs are lower than a fluctuating benchmark. The benchmarkwill be based on a bushel of published gas price indexes, plusaverage transportation costs over the prior year and actual storagecosts. The PBR is expected to be in place starting next January.

Currently, Nicor’s customers pay the passed-through cost of gas,transportation and storage. Under the new plan, they would pay thebenchmarked costs, but if Nicor beats the benchmark over the courseof next year by $30 million or less, those savings will be split50-50 with customers. If Nicor beats the benchmark by more than $30million, 90% of the savings go to customers and only 10% goes toNicor.

“While Nicor gas has a long-standing record for keeping naturalgas costs among the lowest in the nations, the performance basedrate plan would establish economic incentives for the company toreduce those costs even further,” said Nicor Chairman Tom Fisher.

John Madziarczyk, director of rate projects for Nicor, said heexpects no impact on the company’s customer choice program, whichbegins its second year in May. Currently 50,000 customers aresigned up to participate, up from 20,000 last year. Nicor serves1.9 million customers in the northern third of Illinois, excludingChicago.

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