Customer Select Information Meeting · Customer Select Information Meeting – October 22, 2009 2008-2009 Rate Case – Program Changes In April 2008, Nicor Gas filed a request with

Customer SelectInformation Meeting

October 22, 2009

Customer Select Information Meeting – October 22, 2009

Meeting ObjectivesTo provide updates on pertinent information including recent program changes and new legislationTo continue to foster open, ongoing discussions with stakeholders on general program issues in an effort to improve the program


Today’s AgendaProgram History & StatisticsReview of 2009 Program ChangesGeneral Information Updates/RemindersBreakOverview of Illinois Public Act 95-1051Overview of Illinois Public Act 96-0033

Program Historyand Statistics

Pat HollonNicor Gas


Customer Select:Program History

1998: Customer Select pilot program for aggregation services (all C/I customers)

1999: Customer Select pilot expanded to include residential customers in 7 communities (80,000 customers)

2002: Customer Select opened system-wide to all 2 million customers

2005/2006: Tariff changes as part of general rate case

2009: Tariff changes as part of general rate case



0

50,000

100,000

150,000

200,000

250,000

300,000

2000 2001 2002 2003 2004 2005 2006 2007 2008

Cus

tom

ers

12 10 9 9 15Suppliers 12 12 15 13


Suppliers Currently ParticipatingAmbit EnergyCorn Belt Energy CorporationDirect Energy Services, LLCDominion RetailHudson Energy Services, LLCIntegrys Energy Services, Inc.IGS EnergyJust EnergyMidAmerican EnergyMXenergyNicor Advanced EnergyNordic Energy ServicesRealgy Energy ServicesSantanna Energy ServicesSpark Energy Gas, LP


Customers by Supplier

0146607911,3302,1316,404

10,27112,02712,653

31,61234,196

38,393

46,004

62,141

A B C D E F G H I J K L M N O

Num

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009


Transportation (Customer Select & Traditional Transport)Residential 25.5 5.1Commercial 85.4 17.1Industrial 111.7 22.4

222.6 44.7Sales Service 275.5 55.3Total Sendout 498.1 100.0

Customer Select Sendout 45.0 9.0

Customer Select: Supply Statistics

Gas Deliveries 2008Bcf %


Customer Select:Current Enrollment Totals*

Commercial/Industrial 38,364 195,000 20%Residential 224,938 1,983,000 11%

263,302 2,178,000 12%

*Data as of October 15, 2009

Total Eligible % of Eligible



AnnualDate Enrollment Percentage Change

12/31/01 114,768 N/A12/31/02 179,862 57%12/31/03 193,936 8%12/31/04 197,508 2%12/31/05 205,120 4%12/31/06 212,146 3%12/31/07 233,670 10%12/31/08 264,218 13%

Compound Annual Growth Rate from 2001 - 2008 is 12.65%

Review of 2009 Program Changes

Mary Lou GrzeniaNicor Gas


2008-2009 Rate Case –Program Changes

In April 2008, Nicor Gas filed a request with the Illinois Commerce Commission (ICC) for a general rate increase.Nicor Gas did not propose any changes to the Customer Select program as part of the initial filing.Two participating suppliers intervened in the case.An agreement was reached between Nicor Gas and the Customer Select Gas Suppliers in the case.All items within the agreement were approved by the ICC in the Final Order on March 25, 2009.


2008-2009 Rate Case –Program Changes

Nicor Gas revised tariff sheets for Riders 15 & 16 which became effective April 3, 2009 to comply with the Final Order.Changes were communicated via Supplier News on the supplier website (www.nicor.com/select) and through e-mails to participating suppliers.


2009 Program ChangesAccount Chargeo Nicor Gas is no longer billing participating suppliers

the $0.59 per customer monthly account charge.o Associated costs are now included in base rates of

all customers.

Group Additions Feeo Nicor Gas is no longer billing participating suppliers

the $10 group additions fee for customers switching from one supplier to another.

o Associated costs are now included in base rates of all customers.


2009 Program ChangesTransportation Service Credit (TSC)o The TSC is a credit for certain costs included in our

distribution rates which are not applicable to Customer Select customers, such as a portion of uncollectible expenses and some storage-related costs.

o Customer Select customers now receive a credit for the revenue requirement included in base rates associated with gas in storage as part of the TSC. The credit had previously been incorporated within the account charge that was billed to the supplier.


2009 Program ChangesTransportation Service Credit (TSC)

o The TSC is a credit based on usage – ($.0211) per therm. It’s comprised of the following:

• Credit for Uncollectible Gas Expense. The recovery of uncollectible expense is included in base rates. We offset the commodity portion for Customer Select customers because they purchase commodity from their supplier. ($.0112)

• Credit for Storage Gas Losses. The recovery of storage gas losses is included in base rates. We offset this cost for Customer Select customers because their supplier’s deliveries are reduced by the unaccounted-for gas percentage. ($.0062)

• Credit for Gas in Storage. The revenue requirement for sales customers’ gas in storage is included in base rates. We offset this cost for Customer Select customers because their supplier provides their own gas in storage. ($.0037)


2009 Program ChangesStorage Inventory Target Levels

o Suppliers are required to meet specific month-end storage inventory target levels.

o Previous target levels during the winter (Nov. – April) were calculated as a percentage of the group’s inventory on Nov. 1.

o As suppliers added customers during the winter, suppliers didn’t have access to additional storage capacity until the spring.

o Nicor Gas agreed to change the storage targets during the winter to account for customer additions or deletions from a group.

o Storage inventory target levels are now calculated as a percentage of the group’s storage capacity at the end of each month.


2009 Program ChangesStorage Inventory Target Levels (end of month)Nov: 55 - 100% of storage capacity (from preceding 11/1 inventory)Dec: 55 - 75% of storage capacity (from preceding 11/1 inventory)Jan: 35 - 60% of storage capacity (from preceding 11/1 inventory)Feb: 15 - 35% of storage capacity (from preceding 11/1 inventory)Mar: 0 - 35% of storage capacity (from preceding 11/1 inventory)Apr: 0 - 35% of storage capacity (from preceding 11/1 inventory)May: 15 - 100% of storage capacityJun: 15 - 100% of storage capacityJul: 45 - 100% of storage capacityAug: 45 - 100% of storage capacitySep: 45 - 100% of storage capacityOct: 95 - 100% of storage capacity


2009 Program ChangesStorage Capacity & Operational Balancing Requirement

o Prior to the rate case, Customer Select tariffs provided suppliers with storage capacity equal to 28 times the group’s maximum daily contract quantity (MDCQ) plus operational balancing storage capacity of 6 times the group’s MDCQ (3 of which was required to be kept full).

o Beginning in May 2009, storage capacity was increased to 31 times the group’s MDCQ (from 28).

o In addition, Nicor Gas agreed to allow suppliers the ability to cycle their operational balancing capacity. Therefore, the combined storage capacity of 31 + 6 would be used to cycle gas in and out of storage.


2009 Program ChangesDefinitions:

Storage Capacity: 31 times the group’s MDCQ. Additional balancing capacity of 6 times the groups MDCQ will be cycled annually. The combined storage capacity of 37 times the group’s MDCQ is used for calculating the monthly storage inventory target levels and the daily storage injection capacity. Daily Storage Injection Capacity: In the summer, 0.8% of storage capacity assigned to the group. Daily Delivery Ranges:

o Winter Max Delivery = group’s est. use +10%.o Winter Min Delivery = group’s est. usage - 10% - group’s daily storage

withdrawal right.o Summer Max Delivery = group’s est. use + 10% + group’s storage

injection capacity right.o Summer Min Delivery = group’s est. use - 10%.


2009 Program Changes

For detailed information on Supply/Storage as it relates to the Customer Select program visit the supplier website

(www.nicor.com/select), click on the Supplier Information Manual and view Section 5.


2009 Program ChangesNumber of Days to Select a New Suppliero Nicor Gas extended the number of days a

customer has to select a new supplier after returning to Nicor Gas sales service from 45 to 120 days.

o After 120 days the customer is required to remain with Nicor Gas for one year.

o Customers dropped by the supplier for non-payment will be required to remain with Nicor Gas for one year.


2009 Program ChangesResidential Customer Mailing List

o Nicor Gas agreed to make a residential customer mailing list available to Customer Select suppliers.

o The list excludes customers on the Company’s “Do Not Contact” list.

o The list does not include phone numbers – only names and addresses.

o The list is available quarterly at no cost.


2009 Program ChangesResidential Customer Mailing List

o The first list was published in May; second list in August. We plan to publish future lists during the second month of the quarter (Feb., May, Aug. and Nov.).

o Supplier must execute a contract to receive the list.

o Contract is located in the Supplier Information Manual on the supplier website.

o Currently, there are 5 suppliers receiving this list.


2009 Program ChangesOther changes not part of the agreement with suppliers but resulting from the rate case:o Addition of evening cycle nomination – 3:00 p.m.o Storage capacity increased from 28 MDCQ days to

31 days

General Information Updates/Reminders

Theresa VestNicor Gas


Supplier WebsiteCustomer EducationImportant Reminders

General Information Updates/Reminders


Supplier Websitewww.nicor.com/select



o Supplier News



o Supplier Information Manual


Supplier Websiteo Supplier Information Manual

• Record Layouts• Holiday and Meter Reading Schedule• Contact Information• Program Tariffs• FAQ’s• Agreements



o Data Access• Retrieve files• View file submission history


Customer EducationCustomer WebsitesBill InsertsCustomer Information Packet


Customer EducationCustomer website www.nicor.como Residential Tab, Choosing Your Supplier


Customer EducationICC website www.icc.illinois.gov/ags/consumereducation.aspx


Customer EducationICC Website

o Information was developed in conjunction with the Office of the Attorney General, the Citizens Utility Board, Alternate Gas Suppliers and Utilities.

o Nicor Gas provided assistance with the following:• Understanding Your Bill Section – provided a link to Nicor Gas’ site• Validated historical natural gas costs at Nicor Gas• Provided information on how customers can get on Nicor Gas’

Do Not Contact List• Provided definitions for the Glossary of Terms – Customer Select

Charge and Transportation Service Credit• Provided data on delivery charges for the Price Comparison

Worksheet


Customer EducationBill Inserts

o July 2009• Participation is optional• Free to suppliers• List of all participating suppliers• Identifies general program information

o September 2009• Participation is optional• Panels available for purchase• 6 Suppliers Participated• Opportunity for a personalized advertisement


Customer EducationJuly 2009 Bill Insert


Customer EducationSeptember 2009 Bill Insert


Customer EducationCustomer Information Packet

o Available upon requesto Brochure containing general program informationo List of participating supplierso Customer information card containing the customer’s estimated

annual therm use and Nicor Gas’ historical gas cost information.


Customer EducationBill Message

Once the customer is enrolled in Customer Select a message is printed on their bill informing them who their supplier is and how to contact them.


Important RemindersAnnual Deposits and Firm Gas Supply Affidavits

o Due November 1st

Monthly Do Not Solicit Listo Available by the 13th of each month

File Availability Timeso Daily Nom file available by 8:30 a.m. (Central time)o CUSTLIST file generally available by 10:30 a.m. (Central time)o All other files generally available by 8:00 a.m. (Central time)


Important RemindersDaily File Submission Deadlineso Files due by 4:00 p.m. (Central time)

• SIGNUP (supplier sign-up file)• CUSTDROP (supplier drop file)• SUPLBILL (supplier charge file)

o NBPMNT file due by 10:00 a.m. (Central time)

CUSTLIST file – extremely useful fileo Validation that correct customer was enrolledo Customer statuso Balance reconciliation

Break

Illinois Attorney General

Overview of Illinois Public Act 95-1051

Consumer Rights and Protections


Public Act 95-1051 Consumer Rights and Protections

Introduction

Amendments to the PUAo Early Termination / Customer Right to Rescind o $50 Termination Fee Capo Bill Dispute Languageo Consumer Education

Amendments to the Consumer Fraud & Deceptive Practices Act

Enforcemento Utilitieso Illinois Commerce Commissiono Customer

Miscellaneous

Questions



Amendments to the PUAo Early Termination / Customer Right to Rescind Switch

(Sec. 19-115(g)(5))• With early termination clause/fee – w/in 10

business days of first bill issued to customer. Must provide 800 #

• Without early termination clause - w/in 10 business days of utility notice to customer

• Customer shall call utility or AGS to rescind

o $50 Termination Fee Cap



Amendments to the PUAo Bill Dispute Language (Sec. 19-115(e))

• AGS can not bill customer for a disputed amount.

• AGS must inform customer of ICC informal complaint process.

o Consumer Education (Sec. 19-125) http://www.icc.illinois.gov/ags/consumereducation.aspx



Amendments to the Consumer Fraud & Deceptive Practices Act

o Marketing Practices (2DDD)• Solicitation• Authorization• Early termination

o Advertising (2EEE) – “clearly and conspicuously disclose”

o Personal Information / Privacy (2FFF)



Enforcemento Utilities

• NICOR Customer Select - ICC e-Docket 00-0620 and 0621.• Peoples Gas and North Shore Gas Choices for You – e-

Docket 01-0470 and 0469 respectively.

“…The Commission expects that the Company [North Shore Gas Company] will act prudently in determining whether violations of the Standards of Conduct, of which it becomes aware, warrant removal of a supplier from the Program.” 01-0469.

• Tariff sheets consistent with the law and to comply with utilityobligations under Sec. 9-102.



Enforcemento Illinois Commerce Commission

• Material Change in Business (Sec. 19-111)• Obligations of an AGS (Sec. 19-115)

Requirements for an AGS to switch a customerRemedies available to Commission for violation

• Commission Oversight (Sec. 19-120) Commission may open an investigation on its own motion regarding violations of Sec 19-110, 19-111, 19-112, and 19-115.

o Customer



Miscellaneous



Questions

Overview of Illinois Public Act 96-0033

Malcolm QuickNicor Gas


Public Act 96-0033

Sec 8-104 Natural Gas Energy Efficiency Programs

Sec 19-140 On-Bill Financing Program

Sec 18 Financial Assistance Payment Programs


Public Act 96-0033Energy Efficiency Programs

Provides for:o Utilities and the Department of Commerce and Economic

Opportunity “DCEO” implementing cost-effective energy programs

o The use of a Total Resource Cost test to determine effectiveness

o Low-income customer programs that will not be subject to Total Resource Cost test

o Cost-recovery of the programs through utility riders



Provides for:o Utilities filing a 3-year program by October 1, 2010 to be effective

June 1, 2011.

o Utilities using 75% of the funding and DCEO using 25% of the funding.

o Utilities being responsible for 80% of therm reduction goals and DCEO being responsible for 20% of therm reductions.

o Funding up to 2% of utility’s total revenues.



Program Goals:o Therm reductions start with a 2009 base line

o Annual goals beginning June 1, 2011• May 31, 2012 0.2 cumulative percent• May 31, 2013 0.6• May 31, 2014 1.2• May 31, 2015 2.0• May 31, 2016 3.0• May 31, 2017 4.2• May 31, 2018 5.6• May 31, 2019 7.1• 1.5 percent every year thereafter



Program Goals (con’t)o Penalties apply if a utility does not meet the stated goals

• $600,000 for large utilities over 1.5 million customers• $400,000 for medium utilities 500,000 to 1.5 million customers• $200,000 for small utilities under 500,000 customers

o Utility can meet its goals over each three-year period, and not everyyear, without penalty.

o If utility fails to meet its goals in two consecutive three year periods, then an independent program administrator will be appointed.


Public Act 96-0033On-Bill Financing Program

Provides for:o Customers purchasing a qualifying product and paying for it over time

on their utility bill.

o Participation by owners of residential property, up to four units, and small commercial retail customers.

o Participation by customers that purchase their gas from a utility or alternative supplier.

o No upfront payment.



Provides for Workshops with interested partiesDates for the Workshops were:

o August 4o August 17o September 14o October 9

Workshops must be completed by 150 days after enactment of law, or December 14, 2009.Utilities must file program 60 days after the end of the workshops, or by February 12, 2010.



Utility’s program must consist of:o A list of eligible energy efficiency measures o Requests for Proposals (RFPs) issued to potential lenderso Procedures for working with lenders and vendors to establish

terms and conditionso A provision that lender shall conduct credit checks and

approve applications, and handle disputeso Procedures for utility to collect and remit funds to the lendero A total outstanding amount being financed limited to $2.5

milliono A provision that the program be evaluated after 3 years of

operation


Public Act 96-0033Percentage of Income Payment Plan (PIPP)

Purpose of the PIPP is to:o Bring participants’ gas and electric bills into a range of affordability.

o Provide incentive for timely payments.

o Encourage participants to reduce use.

o Identify participants most in need of home weatherization.


Public Act 96-0033Percentage of Income Payment Plan

Provides for:o Utilities, DCEO and local administrative agencies to implement PIPP

and arrears reduction programs. Alternative suppliers may elect to participate.

o Participation by LIHEAP customers with incomes not exceeding 150% of the poverty level.

o DCEO and the agencies determining eligibility.

o Payment of both electric and gas bills, with two-thirds of money allocated to the service that provides the primary heat source.

o Funding from the Supplemental Low Income Energy Assistance fund.



PIPP benefits are:o Credit on customer’s account for gas and electric service in excess of

6% of participant’s income.

o Monthly credits of up to $150 but not more than $1,800 annually, with a minimum of $10 per month.

o Customer remains responsible for charges in excess of PIPP credit.



Benefits of Arrears Programo For each monthly bill paid on time, participant gets credit of one-twelfth

of pre-program arrears up to $83 per month, not to exceed $1,000 for gas and $1,000 for electric.

o After 3 years of the program, a new cap limitation would be established.

o No additional late payment fees on arrears covered by the program.



Current Status of Programo DCEO has issued a detailed implementation plan to the Illinois General

Assembly

o Determining how to implement the plan in the most cost-effective and timely manner

o Will implement the plan at the earliest possible date

o Shall be fully implemented by September 1, 2011

Conclusion


Thank You!

Contact Information:Mary Lou GrzeniaManager, Customer [email protected]

Documents

Customer Select Information Meeting · Customer Select Information Meeting – October 22, 2009 2008-2009 Rate Case – Program Changes In April 2008, Nicor Gas filed a request with