I recently received an email from a fellow Sun City resident indicating that every year they get a letter from Nicor asking them to enroll in a fixed bill gas program. They asked me what I thought of the fixed bill plans. This is an interesting question. Gas, like electricity and telephones, is a regulated utility service. When a utility seeks a rate increase or a change in service, it must win approval from the Interstate Commerce Commission (ICC). So how can Nicor offer varying rate programs? Taking a closer look at such bill programs, we find that the offers are not extended by Nicor but by Nicor Advanced Energy (NAE), an unregulated sister company of Nicor Gas, the utility. NAE markets five plans in northern Illinois.
Given the structure of most of these plans, it’s impossible to make an apples-to-apples comparison with the rate offered by Nicor Gas. Unlike with the utility, the rates of NAE are not regulated or reviewed by the ICC, meaning the company can charge whatever it wants. At first look, these fixed price offers appear like a good deal. In a year when gas prices continue to rise at escalating rates, they just might be. So, how are we, the consumers, supposed to know what to do?
In 1983, the Illinois General Assembly created a nonprofit, nonpartisan organization to represent the interests of residential utility customers across the state – The Citizens Utility Board (CUB). CUB carries out that mission by intervening in ratemaking proceedings before the ICC, in the courts, and before other public bodies, and by providing consumers with information and assistance regarding their utility companies.
The initiatives undertaken by CUB can be reviewed at their website, www.citizensutilityboard.org. CUB doesn’t necessarily say not to subscribe to these plans, but it does indicate that historically, consumers have not benefited much from them. They caution that you should be aware of built-in administrative fees and cancellation fees as well as the risk that you always take when you gamble that rates will go up.
For example, my last Frugal Forum column talked about the price of gasoline reaching an all-time high of $4.37 per gallon a few weeks back and that folks were concerned that the price would go over $5 per gallon. I checked this morning and the price at a nearby service station was $4.06 per gallon – so much for continuing gas price increases – at least, so far. The recent approval of Huntley to join the electricity Consortium to negotiate our electricity provider price will hopefully get us all a better default price for electricity in the future. Of course, you can always opt out and go with ComEd or another provider or take advantage of a fixed price arrangement. The choice is yours. If you have a crystal ball and know for sure what the future prices will be, please let us know.
Keep those letters coming, folks. Send your questions and ideas to: The Frugal Forum, P.O. Box 693, Huntley, IL 60142, or, by email to: thefrugalforum@gmail.com.
