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October 8, 2001
Naperville, Ill. – Nicor Gas announced that it has filed with the Illinois Commerce Commission an October 2001 gas supply charge (GSC) of $0.20 per therm—the lowest GSC since May 1997 when the GSC also was $0.20 per therm for the month. The October 2001 GSC is less than one-third of the $0.63 per therm that was charged in October 2000.
As a result, the Company estimates that customers will see a significant reduction in their October 2001 gas bills compared to October 2000. In addition, typical residential customers utilizing the payment option known as the Budget Plan will see their monthly payment come down by about $30 for the month. At present, approximately 23% of Nicor's two million customers are enrolled in the Budget Plan, whereas about 18% of customers were enrolled going into winter 2000.
"This is good news for all of our customers," says Ted Lenart, assistant vice president of supply operations for Nicor Gas. "The factors that are impacting this coming winter's price environment are polar opposites from last year. The demand for natural gas has dipped considerably, and natural gas production has steadily increased, raising national storage levels. When you combine both of these instances what you're left with is a very attractive pricing environment."
The American Gas Association forecasts that there will be near record levels of gas in storage this year. Through September 2001, storage levels were at 84% of capacity with more than one month remaining for storage injections. Because national gas supply is expected to exceed demand throughout the 2001-2002 winter season, with normal weather, energy industry experts predict much more moderate prices than what occurred during the 2000-2001 winter season.
"I see a less volatile winter than last year when it comes to natural gas prices," said John Snell, principal of Chicago's Risk Management, Inc., which has provided risk management services to public utilities across the country for more than 20 years. "Of course, weather is an important and unpredictable factor. A very cold winter could give us a rally in prices. But, at least in the near future, lower demand and the increase in supply could help offset price spikes brought on by a very cold winter. The bottom line is, the marketplace is better prepared for the winter heating season than last year."
For the Company's Budget Plan customers, lower gas costs will result in a rollback in their monthly payments from October through December 2001. Budget Plan payments are re-evaluated quarterly.
Nicor Gas serves two million customers in a service territory that encompasses most of the northern third of Illinois, excluding the city of Chicago. The company has provided reliable gas services for more than 45 years. Nicor (NYSE: GAS) is a holding company. Its principal businesses are Nicor Gas, one of the nation's largest gas distribution companies, and Tropical Shipping, a containerized shipping business that operates between Florida and the Caribbean. Nicor also owns several energy related subsidiaries and is a partner in Nicor Energy, a provider of unregulated energy products and services. | 
