Advocates question Nicor's ComfortGuard value

The Citizens Utility Board and the Illinois attorney general's office warned suburban customers are likely paying too much for Nicor Inc.'s natural gas line protection service and that it's seldom used claims that Nicor disputes.

The warning claims that the Naperville-based unregulated subsidiary, Nicor Services, offers a product called ComfortGuard that is overpriced and its annual cost is more expensive than average repairs.

The consumer advocates also alleged that Nicor sells the service through an unregulated arm and improperly diverts ComfortGuard's revenue to its affiliate. This prevents that revenue from reducing rate hikes proposed by the utility. Revenue is a key factor that the Illinois Commerce Commission considers when it rules on rate-hike requests.

“Nicor is trying to privatize profits, and that's not the way to go,” said CUB Executive Director David Kolata.

The consumer advocates said during a news conference that the service provides Nicor with about $2 million a month in revenue, but is rarely used by consumers. The cost to consumers is $4.95 per month, or about $59 per year. But the average annual cost to do repairs involving natural gas lines in a home costs is roughly $47 without ComfortGuard, Kolata said.

However, Nicor disputes these claims and said its ComfortGuard program has provided 65,000 repairs, 11,000 inspections and removed 20,000 dangerous connectors during its 12 years.

“This warranty service has protected the safety of its many customers and provided real value to them,” said Nicor spokeswoman Annette Martinez. She said customers have benefited from getting rid of potentially dangerous situations and that the program offers safety to its customers.

“We take issue with their figures,” Martinez said. She also said that Nicor Gas, a regulated utility, does not benefit from revenues generated by Nicor Services, which is unregulated.

The attorney general's office said it wants to ensure that customers are getting all the information they need to make informed decisions.

“They have been led to believe that if they have a gas leak inside their premises and they do not have ComfortGuard, they will have no options but to seek out expensive repair work,” said attorney general spokeswoman Robyn Ziegler. “Customers need to know that the option to have Nicor do the report work is always available to all customers, even customers who do not elect to purchase ComfortGuard. And Nicor's own data shows that when such repair work is performed by Nicor, in the overwhelming majority of cases it is cheaper than purchasing a year's worth of ComfortGuard.”

In 2005, CUB filed a class-action lawsuit against Nicor, alleging the company sold the service to people who didn't need it or enrolled them without their knowledge. Nicor Services settled with a promise to change its marketing, Kolata said.

Then last March, CUB and the attorney general stepped up their efforts against ComfortGuard by saying Nicor overcharged and misled hundreds of thousands of customers with this service. They filed a case with testimony before the Illinois Commerce Commission, saying the charge for ComfortGuard far exceeds its benefits.

A decision in the ICC matter is expected with in the next six months.