Ray Hanania

Ray Hanania

Gas execs need to feel the chill

By Ray Hanania

You would think that record low temperatures might save you money. But not in Illinois and not at Nicor gas, the company that has a monopoly on how we heat our homes.

You can’t switch your utility companies. They are determined by geographic location.

Originally an Illinois company gobbled up by AGL, a Georgia conglomerate in 2011, Nicor was then gobbled up again by Southern Gas Company in 2015, also based in Georgia.

Nicor is the perfect example of how a shell game works.

RayHanania

Ray Hanania

In 2018, the average monthly cost to heat my home comfortably with Nicor was about $50 a month. In 2020, when the pandemic began, it dropped slightly. Then it started to go back up.

The pandemic was a factor. The weather was warmer and many major companies were having employees work from home, which was great for reducing office costs and getting employees to be more productive by working twice as much for the same amount of money. And that kept gas prices down.

Nicor does not profit off the cost of the gas supply. Under Illinois law, Nicor must pass on the costs of natural gas to consumers, with no markup.

However, they make up for it in other ways. Nicor profits off the rates they charge to deliver gas to our homes. You know, through that underground pipeline connected to every home through which little elves work hard and sweat 24 hours a day, lugging that heavy gas to each home and business.

It’s really hard work. Fortunately, the elves do it for free.

That’s why the Illinois Commerce Commission, without protest from Gov. JB Pritzker, gave Nicor a $240 million rate hike last November, the third increase it has gotten in the past four years or more than $501 million in rate hikes since 2017.

I wish “JB” would care about homeowners the way he does his buddies who run Nicor. Did I ever ask out loud why a guy named “Jay Robert” would use the initials “JB” instead of “J.R.”? I digress.

As a consequence, Nicor more than doubled the cost of providing natural gas to customers, not because natural gas prices increased so dramatically, but because their profits dipped and they need the cash to pay for infrastructure improvements and the higher costs of delivery.

Damn elves. Always asking for more cash!

One of the driving forces of the price hikes are surcharges that AGL has imposed on customers through Nicor.

Every government uses the excuse that the pipes are made of lead and installed in the 1800s, or our equipment is eroding and needs to be repaired.

Yet Nicor doesn’t impose a surcharge or price hikes on everyone. They do it just on the customers.

Nicor is a public utility and yet it acts like it is “Gordon Gecko’s” private corporation.

How much do Nicor executives make each year in salaries, bonuses and benefits?

In 2010, Russ Strobel made $3,312,213 in total compensation as chairman of the board, chief executive officer and president of Nicor and Nicor Gas at Nicor Inc. in 2010. $1,540,031 was received as total cash; $1,543,916 was received as equity and $228,266 was received as pension and other forms of compensation.

Not too shabby for the 33rd highest paid executive in the country, according to S&P Capital IQ.

John O. Hudson III was named Nicor president and CEO in June 2020. He also is a senior vice president at Southern Company Gas, which owns four natural gas companies, including Nicor. I guess Hudson has a lot of time on his hands.

But go to Google and type in the query “What is the salary of John O. Hudson III?” and you get zip. Nada. Nothing. So, we can only guess at how much he makes.

The Citizen Utility Board, which monitors utility companies for the public, does a lot of screaming but honestly, they need to get their act together.

So, we are left with Nicor’s suggestion on how to save money. Reduce the heat you use.

Sure, lower the temperature in your home. Wrap yourself in a blanket. Nothing expensive, of course. Something cheap. Put people together in a small room and use body heat to generate warmth.

I have a better idea. How about asking Nicor to reduce their executive salaries and make them wrap themselves in blankets?

Check out Ray Hanania’s columns and political podcasts at hanania.com.

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