Yet Another Utility’s Motives in Question

May 06, 2010

Yesterday we ran a story about west suburban residents facing a water-bill increase due to financial mismanagement by the DuPage Water Commission. Later in the day, we wrote about ComEd’s iffy offer to give Illinois $500 million as long as they get to charge consumers higher-than-market electric rates for four years.

Let’s keep the momentum going with yet another potential utility scam. Today’s involves Nicor Gas.

On the Citizens Utility Board (CUB) web site, there is an entry entitled: Look at your Gas Bill: Do you have ‘Comfort Guard?’  CUB claims that 20 percent of Nicor Gas customers pay $4.95 a month for this gas-pipe repair insurance that they don’t actually need.

Under the Gas Line ComfortGuard plan, a Nicor technician will repair leaks on exposed pipes and appliance connectors in your home. If a technician determines that there is a problem, there is no charge for parts or labor up to $600.

The plan also comes with a guarantee that the work will be done right. Does that mean the work might not be done properly if I have a gas leak, call out Nicor and haven’t been paying the monthly rate?

According to CUB, this plan is overpriced, misleading and a “pure profit machine.” The Illinois Commerce Commission (ICC) reports that only 2 percent of customers that pay for this service had a covered problem inside their home last year, and the average bill for the fix was about $75.

In fact, Nicor paid out $600,000 in benefits under the plan last year but made $26 million off customers paying for this service.

Now, that doesn’t seem right.

Last year, I thought I had a gas leak. I called Nicor. They came out and were nice as pie. I didn’t pay a thing. Granted, I was wrong about the leak, but still …

The ads for this program imply that if you suspect a gas leak, you will have to hire an outside contractor to fix it. The fact is, if a customer suspects a gas leak, Nicor is required by law to come to your house to investigate and fix the problem. In most cases, the problem is outside the home and covered by normal utility charges.

Peoples Gas also has an insurance plan like this called the Pipeline Protection Program. It costs $2.95 a month and covers up to only $300 per incident, but it isn’t being heavily advertised.

Illinois Attorney General Lisa Madigan is calling for Nicor to stop its misleading advertisments. Nicor officials say they will testify in front of the ICC later this year on the validity of this plan; the ICC is supposed to rule on it early next year. If Nicor is found guilty of misleading customers, don’t expect a refund, but do expect to see a barrage of lawsuits filed.

Check out this video from Crain’s Chicago Business about Nicor’s supposed rip-off plan.

Then go check your gas bill.

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It is always amazing to see how far people will go to make an extra buck. Great coverage and it will be interesting to see whether they are found guilty or not.

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