Wednesday, December 7, 2011

ICC Approves Merger of Nicor Gas and AGL Resources, But Condidtionally

The Illinois Commerce Commission voted unanimously today to approve the merger of Nicor Gas and AGL Resources as long as certain conditions are met as part of the reorganization.

Chief among those conditions are those that require base rates to remain fixed at current rates for three years following the closing of the reorganization, and that if there are savings as a result the merger, they will be flowed through natural gas rates to Illinois ratepayers.

Other conditions require the new company to maintain certain jobs, management personnel, training and quality assurance programs and pipeline safety program staff across the Nicor service area for three years and in some cases five years. Specifically, the order directs that the company maintain the same number of full-time equivalent employees and Illinois management personnel in the areas of corrosion control, technical compliance, locating services, transmission integrity management program and the distribution integrity management program for five years. The company also must to maintain the current level of training and quality assurance programs for compliance monitoring activities.

The Commission also adopted conditions that require the reorganized company to maintain economic development activity, social and charitable giving and that an Illinois representative be named to the new company’s board of directors. The company’s CEO will be required to appear annually before the Commission to report on compliance with the conditions in the Commission order.

The Commission ordered Nicor Gas to discontinue solicitation of inside pipe repairs on behalf of an affiliate company, the program known as Comfort Guard, when customers call.

The Commission found it to be an unjustified subsidy of the affiliate company, determined that call center personnel fail to provide pertinent information to customers and that the practice hinders competition for repair services, since Nicor call center personnel have an advantage in selling the service to the utility’s customers when they call.

Section 7-204 of the Public Utilities Act requires the Commission to find that the proposed reorganization will not adversely affect the utility’s ability to provide adequate, reliable, efficient, safe and least-cost public utility service.

The Public Utility’s Act states that the reorganization must not result in unjustified subsidization of non-utility activities by utility customers, will not significantly impair the utility’s ability to raise necessary capital on reasonable terms or to maintain a reasonable capital structure; allocates costs reasonably between utility and non-utility activities in a manner that can be easily identified by the Commission; does not adversely affect competition in the Illinois market; and that it will not result in adverse rate impacts on retail customers.

The Commission order determined Nicor ratepayers should not pay any of the costs associated with the merger and reorganization.

1 comment:

Anonymous said...

What about the jobs of the call center employees who were in a 5 year contract?