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CUBFacts
The “Customer Select” program allows Nicor Gas customers to choose an
alternative company to supply their natural gas.
"Customer Select"—Making the Right Choice How does it work? Traditionally, a utility buys gas on the market and uses its pipelines to deliver fuel to your home.
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The utility is supposed to sell the gas at the same price it pays, with no
markup. Opting for “Customer Select” means you will continue to pay Nicor Gas
to deliver the heating fuel to your home, but you will pay a different company
to buy and supply the actual gas. Unlike your utility, the rates and services
of your new supplier will not be regulated or reviewed by the Illinois Commerce
Commission (ICC). Those companies can charge whatever they want.
To download an Adobe Acrobat version of "Customer Select" —Making the Right Choice. What kind of plans do the companies offer? Most of the plans fall under one of two categories. Fixed-rate plans won’t change for the length of the contract. Their simplicity may be appealing but such plans will likely charge a premium price, and you could lose money in the long run. Variable-rate plans fluctuate from month to month. These plans offer the same kind of pricing as Nicor Gas, with the same degree of uncertainty about what the actual price will be. The prices are tied to a supplier’s cost of gas or some market indicator of gas prices, plus a markup. When you opt for a variable rate, you’re betting that the new supplier can do a better job buying gas than the utility. That may not be a good bet. Are there other charges? Some suppliers charge a monthly fee, which inflates the advertised price. Also, Nicor Gas charges all program participants a per therm “Customer Select” fee. The charge helps cover “balancing” costs for maintaining appropriate pressure in Nicor’s pipe system. (Note: The impact of this fee is lessened by a two cents per therm "Transportation Service Credit.") Beware of an “exit” fee if you want to get out of your plan before the term of service ends. Companies may have an “opt-out period” during which a customer can exit without being penalized. Find out when that period begins and ends. What about some alternative suppliers’ billing methods? Like Nicor Gas, the utility, an alternative supplier buys more gas
Current Customer Select prices
than customers actually use in the summer and stores the extra gas for winter
usage. Unlike Nicor Gas, some suppliers may bill customers for the extra gas
immediately—before they actually use it. This has led to unexpectedly high
summer gas bills and confusion for some customers. Alternative suppliers who
use this method say it can lead to lower winter bills and savings in the
long run—but nobody can guarantee savings.
Ambit Energy Corn Belt Energy Corp. Dominion Retail IGS Energy Integrys Energy Service MXenergy Nordic Energy Services Nicor Advance Energy Santanna Energy Services Spark Energy Just Energy (formerly U.S. Energy Savings Corp.) What new consumer protections just became Illinois law? A new state law mandates that any customers signing up with an unregulated supplier on or after April 10, 2009... -Have up to 10 days to cancel their contractts—once the supplier’s charges first appear on the gas bill—without paying a cancellation penalty. -Can’t pay a cancellation penalty higher thaan $50. -Must give consent, through a signature and a third-party verification process, before they’re signed up for a door-to-door offer. Should I participate in “Customer Select”? There’s no guarantee you’ll save money. In fact, CUB’s Gas Market Monitor shows that consumers are much more likely to lose money with unregulated gas companies. Remember, “Customer Select” is optional. If you don’t sign up, you will continue to be served by Nicor Gas, with rates regulated by the ICC. If you find “Customer Select” too confusing or too risky, you’re not alone. |
