Press Release
For Immediate Release
January 29, 2008
 
Media Contact: Robyn Ziegler
312-814-3118
rziegler@atg.state.il.us
 

ATTORNEY GENERAL MADIGAN: DON’T CHARGE CUSTOMERS FOR GAS THEY DON’T USE

Chicago - Attorney General Lisa Madigan is urging the Illinois Commerce Commission (ICC) to reject a controversial proposal from two natural gas utility companies that would impose surcharges on customers for the delivery of gas they do not use. The gas companies’ proposal would guarantee that the utilities would earn extra profits especially when customers use less gas.

In oral arguments before the ICC on January 23, the Attorney General’s office and other consumer groups urged the commission to deny the request from Peoples Gas Light and Coke Company and North Shore Gas Company, explaining that the plan is contrary to the law and could result in hundreds of millions of dollars in extra charges for residential and small business customers. Staff attorneys for the ICC joined consumer advocates in arguing against the proposal.

“It is clearly unfair to allow utilities to charge customers for the delivery of gas they do not use,” Attorney General Madigan stated.

The ICC is expected to hold public hearings to deliberate on this issue in Springfield today at 1:30 p.m. and Wednesday, Jan. 30, at 10:30 a.m. The ICC must issue a final decision by Feb. 6.

Expert analysis filed by Attorney General Madigan with the commission last year revealed that the utilities’ proposal would charge customers an extra fee to protect utility revenues when customers conserve more than expected or when warm weather results in lower gas delivery sales, even if the company was earning the profits authorized by the ICC. The Attorney General retained utility experts who analyzed the plan and outlined their objections in reports presented to the ICC last September.

The proposed billing scheme, called “decoupling,” works by adding a surcharge to customers’ bills that makes up the difference between what customers actually spend and a pre-determined amount to be set by the ICC.

Many utility companies across the country describe decoupling as a way to protect energy revenues as consumers become more educated about energy conservation and, as a result, use less gas. It applies to the rates utilities charge to deliver gas, not to charges for natural gas itself. In Illinois, as in many states, utilities are permitted only to earn a profit on the delivery of gas and must pass through the cost of the gas commodity at the same market price they paid to obtain it.

“We hope the ICC rejects this unfair charge and keeps utility profits at reasonable levels, as the law requires,” Madigan added.

Assistant Attorneys General Karen Lusson and Janice Dale are handling the case for the Attorney General’s Office.

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