Watch utility bills carefully

We, at the Citizens Utility Board (CUB) are grateful to Mike Leifheit and The Rock River Times for bringing his experience with Nicor Gas Company’s billing discrepancies to our and your readers’ attention. Since CUB is limited as to the information it can obtain regarding utility company practices from the utilities themselves, the careful watch of utility ratepayers are literally our “eyes and ears” in the marketplace. Mike’s column makes a good point. We all need to watch our utility bills very carefully.

In Mike’s particular case, his bill was estimated by Nicor and thought he was billed at too high of a rate. He rightfully obtained a refund after complaining about it. None of us should have to do this. Utilities like Nicor often estimate bills every other month, as they are allowed to under rules of the Illinois Commerce Commission. But they are required to do so as accurately as possible.

This is how Nicor estimates bills. Their computers predict your usage based on the weather and your previous gas usage. When the bill arrives the following month, it reflects the difference between the actual reading and the estimate, billed at a blended rate between the two months. Usually, this method is fairly accurate. However, if the meter reads within the expected range, then the actual bill will reflect the difference between the actual and estimated bills, either billed or credited at the customer’s current month’s PGA rate (purchased gas allowance). The PGA rate changes with every billing cycle based on a proportional blend of the two months’ filed PGAs.

The problem for consumers comes when the actual reading is at least 20 percent higher or lower than the expected reading. When that happens, which isn’t very often, the company’s computer cancels the bill and issues a new one. This new bill splits your usage rate 50-50 between the two months. But if there was a big difference in the price of gas between the two months and your actual usage was much higher in the lower-priced month (as happened to Mike)—you could be overcharged.

The good news is that Nicor really has no reason to do this intentionally. That’s because the company’s overall revenue for the gas itself is limited each year to their actual costs of procuring the gas. This process is made public and audited in annual proceedings before the Illinois Commerce Commission. So if you pay too much, everybody else is paying a little less.

CUB currently has a case pending against Nicor alleging that the company overcharged ALL of its customers in recent years. The evidence shows, we believe, that the company overcharged everyone equally. But, as Mike found out, it pays to be vigilant. And his experience also shows that it pays to complain if you believe you are being overcharged. Consumers with complaints about utility charges can call the CUB Consumer Hotline for assistance toll-free at 1-800-669-5556. Visit our Web site at for more information on Illinois utilities and CUB’s work in advocating for residential and small business utility customers in the courts, Illinois Commerce Commission, Illinois Legislature and before federal regulatory bodies.

Martin Cohen is executive director of the Citizens Utility Board.

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