Madigan opposes Nicor's application for rate increase

Chris Rizo Sep. 4, 2008, 9:40pm

Lisa Madigan (D)

SPRINGFIELD, Ill. (Legal Newsline)-Nicor Gas should not be allowed to raise the company's revenues by $140 million, Illinois Attorney General Lisa Madigan told state regulators.

In written testimony filed Thursday, Madigan urged the Illinois Commerce Commission to deny Nicor's requests for rate increases. The Naperville, Ill.-based company is seeking authorization for five separate surcharges to customers' bills.

One of the surcharges would collect a minimum delivery charge from every customer regardless of how little natural gas the customer actually uses.

The attorney general's office said Nicor's rate plan would increase the monthly customer charge by 39 percent, from $8.40 to $13.55. The average ratepayer would see a 31 percent rate kike, under the proposal.

"During these extraordinarily difficult economic times, many families are already struggling to make ends meet," Madigan said. "Nicor's proposed rate increases could not have come at a worse time. This is not the time to increase Nicor's revenues at the expense of Illinois families."

Madigan's letter follows an expert report last month that concluded Nicor overstated its revenue needs by $86 million. The report was commissioned by the AG's office.

Nicor said in its rate increase application that the company is seeking to recover its costs by raising the per-therm charges it imposes to deliver natural gas, as well as the monthly customer charge.

Illinois, like many other states only allows utilities to make a profit on the delivery of natural gas.

The utility has said even with the requested new rates, Nicor would remain the lowest-cost natural gas provider among major Illinois utilities and among the lowest-cost natural gas utilities in the country.

"We have kept our rate relief request to the minimum necessary to meet our obligations to provide safe and reliable service and to keep our company - an important contributor to the Illinois economy - financially healthy and moving forward," Nicor CEO and Chairman Russ Strobel said in a statement when the company applied for the rate increases.

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