Citizens Utility Board Questions Nicor Sale
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UPDATED 12/08/10 7:01 a.m.
NAPERVILLE, Ill. (CBS) – The Citizens Utility Board wants to know what the proposed sale of Nicor will mean for consumers.
The watchdog organization is taking a close look at how the sale of the Chicago area’s biggest natural gas distributor would impact costs and service.
The organization said it will monitor the deal for its implications for rates and customer service. The Illinois Commerce Commission, which regulates Nicor rates, could kill the sale by withholding approval.
“The key question is how a company like AGL will manage a utility of Nicor’s size,” said Jim Chilsen, CUB’s communications director. “This is a company that’s about to double its gas company base.”
The Illinois Attorney General’s office and state regulators also questioning the $2.38 billion deal.
Nicor said in a news release that AGL Resources will buy Nicor for $2.4 billion in cash and stock. Once the deal is done, current AGL shareholders will own about two thirds of the new company, while current Nicor shareholders will own about one third.
According to a statement released by both firms, AGL Resources will maintain its corporate headquarters in Atlanta and locate its newly expanded gas distribution headquarters in Naperville.
John Schmitt, president and CEO of the Naperville Area Chamber of Commerce, told The Sun Monday that Nicor employs 2,300 people in Naperville.
AGL Resources spokesperson Tami Gerke said Tuesday morning that this figure likely would remain about the same.
“We have committed to keeping job levels stable for at least three years,” Gerke said. “This transaction is not primarily about cost-savings.”
Schmitt said Tuesday he hopes that to be the case.
“Obviously, there’s a lot of unknowns but from what I’ve seen they’re going to keep part of the company in Naperville, maybe even bring some of their divisions to Naperville, which would be positive,” Schmitt said. “From what I’ve read it’s going to be a bigger company overall. Hopefully they will be able to maintain the quality of service in this area and maybe even improve on this service.”
The Sun-Times Media Wire contributed to this report.