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Rates And Transportation Service Options

RATE OPTIONS FOR MOST CUSTOMERS
SIMILAR RATES ARE AVAILABLE FOR LARGE CUSTOMERS
SELECTING YOUR SERVICE
KEY FEATURES OF UNBUNDLED SERVICE
ADDITIONAL SERVICE OPTIONS
SUMMARY OF CHARGES
TERMS

Today, energy plays an important role in every business' operations. Natural gas is a wise choice because it's economical and environmentally friendly. We recognize that your energy needs are unique and may change as your business changes. That's why we have rate options that enable you to make choices that best meet your needs. On the following pages, you will find information that will help you realize the most value for your energy dollar. We encourage you to review your options and periodically evaluate your energy needs. Please contact us at any time for assistance. Since the introduction of transportation service in the mid 198Os, more than 20,000 customers have decided to purchase natural gas supplies from a source other than Nicor Gas. Customers make purchases themselves or through energy management services or brokers/marketers. These supplies are distributed through Nicor Gas' system. Transportation customers have options that include use of our underground storage system, the choice of individual or group billing, and the ability to choose varying backup levels and service options. Our rate classifications are based on the way customer groups use natural gas and the impact of their use on the operation and maintenance of our system. Factors that are considered include annual load (how much natural gas is used during the year) and load factor (how uniform the use is throughout the year). If your use remains fairly constant throughout the year, you have a high load factor. If your use rises and falls throughout the year, your load factor is low.


RATE OPTIONS FOR MOST CUSTOMERS |  [Top of Page]

Rate 4 - General Service Rate 4 is appropriate for commercial and industrial customers ranging from small users to those with annual use greater than 800,000 therms. Rate 4 customers purchase all natural gas supplies from Nicor Gas. Rate 4 with Rider25- Firm Transportaion Service The customer profile described above is the same. These customers, however, arrange for purchases from another source and contract with Nicor Gas for storage and 100 percent backup service. Rate 74 - General Transportation Service The customer profile is the same as above. Customers arrange for purchases from another source and contract with Nicor Gas for varying storage and firm backup options. Rate 74 is one of our "unbundled" rates because you can select your storage and backup levels.

SIMILAR RATES ARE AVAILABLE FOR LARGE CUSTOMERS |  [Top of Page]

Rate6 - Large General Service Rate 6 is economical for large commercial and industrial customers with annual loads greater than 800,000 therms and high load factors. This rate has a minimum monthly bill of $2,800, excluding gas costs. Customers purchase all natural gas supplies from Nicor Gas. Rate 7 - Large Volume Service Industrial customers with a monthly use greater than 400,000 therms find this rate most economical. Rate 7 has a minimum monthly bill of $6,000, excluding gas costs, and is dependent on load factor. A detailed analysis by your account executive will determine whether Rate 6 or 7 is more appropriate. Rates 6 and 7 with Rider 25: The customer profiles previously described are the same. These customers, however, arrange for purchases from another source and contract with Nicor Gas for storage and 100 percent backup service. Rates 76 and 77: Similar to Rate 74, these are unbundled transportation rates for customers described under Rates 6 and 7.

SELECTING YOUR SERVICE |  [Top of Page]

Customers have many choices when selecting their service. They can purchase all supplies from Nicor Gas as a "sales service" customer, or elect to become a transportation customer under either Rider 25 or one of the unbundled transportation rates --Rate 74,76 or 77. If you can secure supplies at costs lower than our Gas Cost, your savings can be considerable. Rider 25 is a fully bundled service under which customers can transport their own supplies. A fixed storage capacity is assigned to each customer equivalent to 26 times their Maximum Daily Contract Quantity (MDCQ). Each customer is fully backed up and any supplies required in excess of customer-owned gas will be provided by Nicor Gas at the Commodity Gas Cost. Customers that have more than one account in our service territory may form groups. Grouping allows consolidation of administrative activities such as nominating gas.

KEY FEATURES OF UNBUNDLED SERVICE |  [Top of Page]

Greater savings may be realized by customers who choose to reduce their services under an unbundled transportation rate. There are, however, risks that you assume by reducing your purchase of backup service and you need to understand a few parameters. Critical Day Nicor Gas will declare a Critical Day when it is necessary to maintain the operational integrity of the company's system. A Critical Day will occur only between November 1 and April 30. On these days, your storage withdrawals will be limited and your use of company supplies will depend on your service selections. Storage Banking Service (SBS) Transporters can select their level of storage capacity. A selection of at least one MDCQ-day is required and a bank of 26 MDCQ-days is available to all customers. SBS customers will be allowed Critical Day withdrawal rights of 2.3 percent of their SBS capacity. Firm Backup Service (FBS) With this service, you can contract for an amount of company-supplied gas on a Critical Day in addition to 2.3 percent of your SBS capacity. Recording Devices Customers selecting unbundled transportation service will have their use and nominations balanced daily through the use of a recording device installed by the company. The recording device requires a telephone line which must be provided by the customer. Gas is accounted for in the following order: 1. Requested Authorized Use 2. Deliveries of customer-owned gas 3. Customer-owned gas withdrawn from storage 4. Company-supplied gas under FBS 5. Authorized Use 6. Unauthorized Use On a non-critical day if customer use is greater than deliveries, the remainder of gas requirements are met first from customer gas withdrawn from storage, next from company supplies under FBS -charged at the Commodity Gas Cost (CCC)-and finally, Authorized Use -charged at the Gas Cost (GC). On a Critical Day, requirements are met in the same order, but with some limits. Customers can withdraw only 2.3 percent of their SBS capacity from storage. Additionally, Authorized Use -charged at the GC is limited to company supplies up to the remainder of unused SBS withdrawal rights. The balance of any company supplies will be charged as Unauthorized Use at $6 per therm plus the GC.

ADDITIONAL SERVICE OPTIONS |  [Top of Page]

Supplier Transportation Service
Under Rider 13, Supplier Transportation Service, up to 50 accounts that are not commonly owned have the opportunity to be grouped. This service is available to customers electing an unbundled rate. Nominations, SBS and FBS will be monitored at the group level. However, on a Critical Day, customers will be monitored based on their individual SBS and FBS selections. The group manager is assessed a $50 monthly grouping fee and is responsible for all company-supplied gas charges.

Storage Balance Transfers    

A customer or group manager may request a transfer of any month-end excess storage balance. The request may be submitted up to 20 days after the bill with the excess storage charge is issued. The transferring party will be assessed a $35 fee.

Additional Storage
If some transportation customers choose less than 26
MDCQ-days when selecting Storage Banking Service (SBS) capacity, the additional storage will be available to other transportation customers. Each year, the company will determine and allocate this unsubscribed storage to transportation customers requesting more than 26 days.  This storage will be treated as additional SBS capacity.
 

SUMMARY OF CHARGES |  [Top of Page]

  Rate 4 Rate 74

 

Monthly Customer Charge

 

 

 

     Less then 1,000 cfh

     1,000 cfh to 10,000

      More than 10,000 cfh

Based on meter size and use of natural gas in cubic feet per hour (cfh).

 

$ 11.50

$ 50.00

$100.00

 

$ 11.50

$ 50.00

$100.00

 

 

Distribution Charge

 

 

 

      First 150 therms at

      Next 4,850 therms at

      More then 5,000 therms at

$0.1330

$0.0683

$0.0377

$0.1195

$0.0548

$0.0241

 

Administrative Charge

 

 

 

     Single Account

     Group Account

 

$24

$14

 

Recording Device Charge

 

 

 

     Diaphragm meter

     All other meter types

 

$4

$12

     

 

  Rate 6 Rate 76

 

Monthly Customer Charge

 

 

 

 

$450

$474

 

Distribution Charge

 

 

 

     All Therms

$0.0207

$0.0138

 

Minimum Monthly Bill

 

 

 

Customer Charge + Distribution Charge

$2,800

$1,900

     

 

  Rate 7 Rate 77

 

Monthly Customer Charge

 

 

 

 

$ 573

 

$ 597

 

 

Distribution Charge

 

 

 

      First 10,000 therms

      More then 10,000 therms

$0.9847

$0.0750

 

$0.4633

$0.0155

 

 

Commodity Charge

 

 

 

     All Therms

$0.0030

$0.0030

 

Minimum Monthly Bill

 

 

 

Customer Charge + Demand Charge + Commodity Charge

$6,000

$6,000

     

 

Additional Charges for Rates 74, 76 & 77

 

Storage Banking Service

$0.0039 per SBS Capacity therms

Firm Backup Service

FBS therms x DGC

 

Rider 25 Charges

 

        Administrative Charge

                       Single Account

                       Group Account

 

$24

$14

Demand Gas Cost

(.4 x MDCQ)x DGC



Monthly Billing Example for XYZ Customer on Rate 4


Sales Service

Customer Information                                                       

Variable Costs

Use supplied by Nicor             2,000 Therms

Gas Cost (GC)                  $0.2538

MDCQ                                      100 Therms

Environment Cost                0.0021


Monthly Customer Charge                                                                                  $11.50

 

Distribution Charge

150therms x$0.1330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $  19.95
1,850 therms x $0.0683…………………………………………….  $126.36
0 therms x $0.0377 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...$ 00.00
Total Distribution Charge                                                                      $146.31

Gas Supply Cost
Customer Use x Gas Cost (GC)
2,000 x $0.2538                                                                                  $507.60

 

Environment Cost
Customer Use x Environment Cost
2,000 x $0.0021                                                                                   $4.20

Amount Due to Nicor Gas (before taxes)                                               $669.61


TAX CONSIDERATIONS

There are some tax implications to consider when evaluating transportation service
options. Illinois legislation in early 1996 may exempt some charges on your bill from the
5 percent state utility tax. If you had a natural gas transportation contract on or before
March 1, 1995, you began receiving this exemption January 1, 1996. All natural gas
charges will be exempt from taxation, including charges for natural gas purchased from
Nicor Gas, backup and transition charges.

If you discontinue transportation service and return to purchasing your natural gas from Nicor Gas, you will continue to be exempt from the 5 percent state utility tax on the Gas Supply Charge.


 

 


Monthly Billing Example for XYZ Customer

on Rate 4, with Rider 25

 

Customer Information (Single Account)

Variable Costs

Use                                          10,000 Therms Supplied by:                                                            Customer                                   7,500 Therms                                 Nicor Gas                                  2,500 Therms                                MDCQ                                         500 Therms                               Storage Bank Capacity
        26 days x 500 therms       13,000 Therms

Gas Cost (GC)                         $0. 2538 Demand Gas Cost (DGC)           0.8223 Commodity Gas Cost KGC        0.1937 Environment Cost                        0.0021 Transition Surcharge                    0.0118


 

Administrative Charge                                                                                               $24.00

Monthly Customer Charge                                                                                        $50.00

 

Distribution Charge
150thermsx $0.1330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $19.95
4,850 therms x $0.0683…………………………………………..    $331.26
5,000 therms x $0.0377…………………………………………..    $188.50
Total Distribution Charge                                                                                             $539.71

 

Gas Supply Cost
Demand Gas Cost -(. 4 x MDCQ)x Demand Gas Cost (DGC)
(. 4x 500)x$0.8223 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..$164.46
Company-Supplied Gas Cost -Company-Supplied Gas x Commodity Gas Cost (CGC)
2,500x$0.1937 ……………………………….................................$484.25
Total Gas Supply Cost                                                                                           $648.71


Environment Cost
Customer Use x Environment Cost

10,000 x $0.0021                                                                                                    $21.00


Transition Surcharge

Customer-Supplied Gas x Transition Surcharge                                                         $88.50

7,500 x $0.0118

Amount Due to Nicor Gas (before taxes)                                                                  $1.371.92

 

 

 

Monthly Billing Example for XYZ Customer

on Rate 74

Customer Information (Group Member)

Variable Costs

Use                                    30,000 Therms
Supplied by:
Customer                          30,000 Therms
Nicor Gas                                  0 Therms

MDCQ                               2,000 Therms

Demand Gast Cost (DGC)             $0.8223

Environment Cost                             0.0021

Transitioin Surcharge                        0.0118

 

Storage Banking Service (SBS)

Firm Backup Service (FBS)          200 Therms

Storage Banking Service (SBS) Capacity

 26 days x 2,000 MDCQ        52,000 Therms

 


Administrative Charge                                                                                              $14.00

Monthly Customer Charge                                                                                      $100.00

Recording Device                                                                                                      $12.00

Distribution Charge
150 therms x SO. 1195 ...............……. $17.92
4,850 therms x SO. 0548.. ................. $265.78
25,000 therms x $0.0241. .........…...... $602.50
Total Distribution Charge                                                                                        $886.20

Storage Banking Service (SBS)Charge
Storage Banking Service (SBS)Charge x SBS Capacity                                               $202.80
$0.0039 x 52,000

Firm Backup Service (FBS)Charge
Firm Backup Service (FBS)level x Demand Gas Cost (DGC)
200 x $0.8223                                                                                                           $164.46

Environment Cost
Customer Use x Environment Cost
30,000 x $0.0021                                                                                                        $63.00

Transition Surcharge
Customer-Supplied Gas x Transition Surcharge
30,000 x $0.0118                                                                                                      $354.00

Amount Due to Nicor Gas (before taxes)                                                                 $1.796.46




TERMS |  [Top of Page]

The following list provides only a brief definition of various terms. Please refer to the specific rate, Rider 6 and Terms and Conditions tariff sheets for in-depth descriptions.

Administrative Charge
A fixed charge covering our administrative costs including billing, accounting and programming. This charge is applied to all Rider 25 and Rate 74 customers. The charge is $24 for a single account and $14 for each member of a group.

Company-Supplied Gas
Gas the customer purchases from Nicor Gas.
This includes Requested Authorized Use, company-supplied gas under FBS and Authorized Use.

Critical Day
A Critical Day can be declared any time between November 1 and April 30 when it is necessary to maintain the operational integrity of the company's system. On these days, withdrawal restrictions and Unauthorized Use will be in effect.

Customer-Owned Gas
Any gas the customer purchases from a source other than Nicor Gas. Gas is transported through our company's distribution system under transportation rates.

Distribution Charge
A charge covering our operating and financial costs,
including payroll, taxes and other fixed costs not covered by the Monthly Customer Charge.

Environment Cost
Recovery of the costs we are incurring for the study and possible clean up of former manufactured gas plant sites.

Firm Backup Service (FBS)
A quantity of gas selected by the customer that Nicor Gas will supply on any day, including a Critical Day.

Monthly Customer Charge
A fixed charge covering a portion of our costs to make gas service available.

Requested Authorized Use
These company supplies may be requested and if available, will be accounted for as the first gas through your meter.

Storage Banking Service (SBS)
A customer-selected capacity for storage service with a minimum level of one MDCQ-day.

Storage Withdrawals)
Customer use exceeding Requested Authorized Use and customer-owned gas delivered. On a Critical Day, withdrawals will be limited to 2.3 percent of the customer's SBS capacity.

Transition Surcharge
Reflects the pass-through to transportation customers of amounts billed to Nicor Gas by interstate pipelines for gas supply realignment costs.


 QUESTIONS AND ANSWERS ABOUT RATES AND SERVICE OPTIONS

Q:
How will I be notified of a Critical Day?

A: Nicor Gas will post a notice on the company's electronic bulletin board and on a recorded dial-in message at least 28 hours before the start of the Critical Day. When a Critical Day occurs, you can change your nominations until 8 a. m., four hours before the start of the Critical Day.

Q: Is there a limit to the Firm Backup Service selection?

A: No, but most customers won't need to select more than 40 percent of their MDCQ. If 26 days of SBS are selected, 60 percent of peak use can be satisfied through SBS withdrawal rights.

Q: How much company-supplied gas is available to me on a Critical Day?

A: 
In addition to FBS, company supplies are available under SBS. If you have less gas in storage than your withdrawal rights, the company will supply the difference as Authorized Use. Any gas used in excess of these quantities will be Unauthorized Use and subject to the $6 per therm charge.

Q: How will my MDCQ be determined?

A:
The MDCQ will be the greater of the highest daily use from the previous year or the result of a regression analysis to a peak day on the previous year's winter use. The MDCQ will be subject to Nicor Gas approval. If daily information is not available, the following formula applies.

Peak Billing Period Therms x 30
     Billing Period Days x 21


Q: When will the MDCQ be redetermined?

A:
Nicor Gas will redetermine a customer's MDCQ each year based on the previous calendar year. The customer will be notified by April 1 of their new MDCQ that becomes effective June 1. If the redetermined MDCQ is within 5 percent of the current MDCQ, no change will be made.

Q:What if my gas in storage exceeds my storage bank capacity?

A:
A fee of  $0.10 per therm will be charged monthly for every therm in storage in excess of your storage bank capacity. For customers who are monitored daily under an unbundled transportation rate, the excess storage fee is based on the maximum number of therms over your
bank capacity in that billing period. If the excess amount is less than 5 percent of your SBS capacity, no charges will be assessed.

Rates effective:
April 11, 1996

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