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Nicor Inc. has added a
news release to its Investor Relations website.
Title: Nicor Gas Files Rate Relief Request
with Illinois Commerce Commission
Date: 4/29/2008 4:05:00
PM
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of our news releases, please click here
New rates would recover capital investments, higher operating costs and expand energy conservation programs
NAPERVILLE,
Ill.--(BUSINESS WIRE)--April 29, 2008--Nicor Gas
announced it has filed today
with the Illinois Commerce Commission
(ICC) for an increase in rates
to help ensure that it continues to
provide its 2.2 million
customers in northern Illinois with safe and
reliable natural gas service.
Nicor Gas previously announced its rate
filing intentions in a press
release dated April 18, 2008.
The requested new rates
would add approximately $4.60 per month to
the average residential customer
bill. If granted after ICC review,
the new rates would likely take
effect in the spring of 2009. When
calculated as a percent of the
total monthly bill for the typical
residential customer - including
gas costs, taxes and delivery charges
- the increase would be about 5
percent.
Even with the requested
new rates, Nicor Gas would still be the
lowest-cost natural gas provider
among major Illinois utilities and
among the lowest-cost natural
gas utilities in the country.
The rate increase would
not apply to the cost of the gas itself,
which Nicor Gas purchases on the
wholesale market and passes along to
consumers without any mark-up. The
increase would only apply to what
Nicor Gas charges to deliver the
gas to homes and businesses -
typically between 15 to 20
percent of a customer's annual bill.
The increase is needed
to cover higher operating costs and
investments in the gas company's
distribution system. The utility also
seeks to expand energy
conservation programs.
Distribution system
investments include new compressors for the
underground storage fields that
allow Nicor Gas to purchase less
expensive natural gas for
customers in the off-season and replacement
of older cast iron mains with
polyethylene plastic or coated steel
pipes that are more reliable and
easier to maintain over time.
Nicor Gas is seeking an
overall increase in business and
residential rates of $140.3
million. It is also seeking an allowed
rate of return of 9.21 percent
on a rate base of about $1.5 billion.
In its last rate case, filed in
2004, the company was granted an
allowed rate of return of 8.85
percent. The company's requested
allowed rate of return reflects
a return on equity of 11.05 percent.
Nicor Gas said that
existing rates are not sufficient. Current
rates do not consider about $750
million in past and planned
infrastructure improvements
since the company's last rate case.
Sustained high natural gas
prices and the sluggish economy have
increased company expenses. As a
result, Nicor Gas has been earning
less than its allowed rate of
return for a number of years.
"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," said Russ M. Strobel, Nicor
Gas Chairman, Chief Executive
Officer and President.
"Nicor Gas
understands the impact of utility bills on its
customers, and we work hard to
keep costs down. We've put a special
emphasis on managing our costs,
and that's reflected in rates that are
lower than those of every other
major Illinois gas utility, and among
the lowest in the entire
nation," Strobel said.
Nicor Gas also announced
a new Conservation Partnership Plan to
encourage greater energy
efficiency and conservation by utility
customers in partnership with
the company. The plan will include two
components that are proposed in
its rate case: (a) use of a new rate
mechanism that supports
conservation and (b) increased investment in
energy efficiency programs.
The new rate mechanism,
known as decoupling, is designed to break
the link between recovery of the
company's costs - largely fixed in
nature -- and the quantity of
gas used by customers. It aligns the
interests of Nicor Gas with its
customers by allowing the company to
encourage and promote
conservation and energy efficiency programs to
help customers manage their
bills. At the same time, it provides the
company the opportunity to earn
a fair rate of return on its system
investments.
This progressive ratemaking
approach has been approved by public
utility commissions in Illinois
and 12 other states, including
California, New York, New
Jersey, Ohio, Indiana, and is under active
consideration in several others.
The second component of
the Conservation Partnership Plan would
establish a new conservation
fund. This fund would be administered by
an independent board and would
invest in energy efficiency and
conservation projects throughout
Nicor Gas' service territory.
The company also filed
for additional rate design changes,
including cost recovery riders
related to the cost of gas used for
company operations,
uncollectible expense and qualifying
infrastructure programs.
Certain information
filed today with the ICC, including 2008 and
2009 projections on which the
rate request is based, will be available
on the following Web site link:
https://public.sonnenschein.com/nicorgas
Nicor Inc. (NYSE: GAS)
is a holding company and is a member of the
Standard & Poor's 500 Index.
Its primary business is Nicor Gas, one of
the nation's largest natural gas
distribution companies. Nicor owns
Tropical Shipping, a
containerized shipping business serving the
Caribbean region and the
Bahamas. In addition, the company owns and
has an equity interest in
several energy-related businesses. For more
information, visit the Nicor Web
site at www.nicor.com.
Nicor Gas is one of the
nation's largest natural gas distribution
companies. Owned by Nicor Inc. (NYSE:
GAS), a holding company, Nicor
Gas has provided safe and
reliable natural gas service for 50 years.
Its service territory
encompasses most of the northern third of
Illinois, excluding the city of
Chicago. For more information, visit
the Nicor Gas Web site at
www.nicorgas.com.
Caution Concerning Forward-Looking
Statements
This document includes
certain forward-looking statements about
the expectations of Nicor Gas. Although
Nicor Gas believes these
statements
are based on reasonable assumptions, actual results may
vary
materially from stated expectations. Such forward-looking
statements
may be identified by the use of forward-looking words or
phrases
such as "anticipate," "believe," "expect,"
"intend," "may,"
"planned,"
"potential," "should," "will,"
"would," "project,"
"estimate,"
"ultimate," or similar phrases. Actual results may differ
materially
from those indicated in the company's forward-looking
statements
due to the direct or indirect effects of legal
contingencies
(including litigation) and the resolution of those
issues,
including the effects of an ICC review, and undue reliance
should
not be placed on such statements.
Other factors that could
cause materially different results
include,
but are not limited to, weather conditions; natural
disasters;
natural gas prices; fair value accounting adjustments;
inventory
valuation; health care costs; insurance costs or recoveries;
legal
costs; borrowing needs; interest rates; credit conditions;
economic
and market conditions; accidents, leaks, equipment failures,
service
interruptions, environmental pollution, and other operating
risks;
energy conservation; legislative and regulatory actions; tax
rulings
or audit results; asset sales; significant unplanned capital
needs;
future mercury-related charges or credits; changes in
accounting
principles, interpretations, methods, judgments or
estimates;
performance of major customers, transporters, suppliers and
contractors;
labor relations; and acts of terrorism.
Readers are cautioned
not to place undue reliance on these
forward-looking
statements, which speak only as of the date of this
release.
Nicor Gas undertakes no obligation to publicly release any
revision
to these forward-looking statements to reflect events or
circumstances
after the date of this release.
CONTACT: Nicor Gas Financial Contact: Mark Knox, re: N-996 630-388-2529 or Media Contact: Annette Martinez 630-388-2781 SOURCE: Nicor Gas |