Nicor under investigation

The Citizens Utility Board (CUB) says an internal report by Nicor Gas Co. which outlines company wrongdoing, greatly understates company misdeeds and their effect on consumers and does not answer charges that the company made false statements to state regulators.

The report was presented to Nicor’s board of directors but not released publicly. It concludes, according to CUB, that the company is not guilty of criminal acts or fraud and overcharged its customers by no more than $15 million.

Nicor did not return calls from The Rock River Times.

CUB says it has evidence showing that the overcharges were much more than $15 million and that the company may have been guilty of perjury and fraud in its quest to boost profits under an alternative regulatory plan. CUB called on Nicor to make the report public.

Martin Cohen, CUB executive director, said: “This is a self-serving report that fails to accurately assess the magnitude of the company’s wrongdoing. We believe the evidence shows the company lied to the ICC and cheated its customers, but Nicor refuses to acknowledge its culpability and pay back consumers every nickel they were overcharged.”

The Illinois Commerce Commission is reviewing Nicor’s alternative regulation plan, which was approved in 1999. Earlier this year CUB filed testimony claiming the company overcharged its customers by $27 million.

In June a whistleblower, working within Nicor, informed CUB that the actual overcharges were five times that amount. The whistleblower said deliberate manipulation of the plan by Nicor had resulted in overcharges of as much as $133 million.

Under the plan, Nicor keeps half of any savings it achieves if it buys gas below a benchmark price, and consumers keep half the losses if costs are above that level. The idea is to spur more efficient purchasing of natural gas.

The whistleblower and CUB allege that Nicor manipulated the benchmark price so that the company gained no matter what the gas price was. They say Nicor also benefited from charging more for inexpensive gas it had been storing for several years.

These revelations have brought the Illinois State Police into the picture. They are investigating all allegations.

CUB, meanwhile, has called on the ICC to scrap the plan. Nicor announced it will cancel the program at the first of the year. The ICC is holding hearings on the claims and CUB’s demand for refunds to consumers.

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