Promising Technologies

Nicor Gas improves customer experience through EEPs

Headquartered in Georgia, USA, northern Illinois outfit Nicor Gas is a natural gas distribution company that was established in 1954. Following a merger in December 2011, Nicor Gas became a wholly owned subsidiary of Atlanta-based AGL Resources. The merger led to Nicor Gas becoming one of the country’s largest natural gas distribution companies based on the number of customers. At present, the company serves more than 2.2 million customers in 646 communities in northern Illinois and owns approximately 34,000 miles of pipeline network.

Nicor Gas’s EEP

To improve customer experience, Nicor Gas launched various initiatives like website en-hancements as well as an energy efficiency programme (EEP) in 2010. The EEP provides customers energy education, resources and financial rebates for the purchase of qualifying energy saving natural gas products like water heaters, furnaces and boilers. Nicor Gas’s first EEP ended in May 2014. Notably, the company has issued more than $3 million in rebates under the programme, allowing residential and business customers the opportunity to “go green and save green” at the same time. In September 2013, Nicor Gas filed its second EEP, which outlines the programme’s offerings and therm reduction goals with a spending of $93 million over a three-year period that began in June 2014.

The success of Nicor Gas’s EEP has been recognised by the Association of Energy Services Professionals, which awarded the company for its work on the 6 Million Therm Savings campaign developed by CLEAResult, a Texas-based provider of EEPs and services. The campaign depicts how businesses can take control of their energy costs with simple and cost-effective steam trap replacement. For instance, in April 2014, Nicor Gas gave Chrysler’s Belvidere Assembly Plant in Illinois a rebate check for $1.3 million, the result of savings from three projects and the largest incentive for energy efficiency ever awarded by Nicor. These three projects are believed to have saved nearly 2.5 million therms per annum.

It was reported in June 2014 that Nicor Gas had launched its new three-year energy efficiency retrofit and rebate programme called EnergySMART. The new programme has specialised rebates for individual homes, multifamily residences, small businesses and custom programmes. EnergySMART also offers free energy assessment to both single-family and multifamily residences.

Emerging Technology Programme

Nicor Gas’s Emerging Technology Programme (ETP) is part of its ongoing EEP. Under this, Nicor Gas selects and assesses promising new technologies that have the potential for Nicor Gas customers to realise natural gas savings. The ETP focuses on technologies that are new in the market or have not yet achieved broad market adoption. After initial pilot assessments, the technologies are evaluated to determine if they should be added to Nicor Gas’s EEP.

In 2013, Illinois enacted a legislation allowing Nicor Gas to provide more widespread safety and reliability enhancements in its distribution system. The legislation stipulated that the increase in rates in customer bills as a result of any infrastructure investments should not exceed an annual average of 4 per cent of base rate revenues.

Nicor Gas’s GIS initiatives

In December 2006, the US government passed the Pipeline Inspection, Protection, Enforcement, and Safety Act. According to this, the Pipeline and Hazardous Materials Safety Administration (PHMSA) must publish minimum standards for distribution integrity management programmes for gas distribution pipelines. These new regulations require operators of natural gas distribution pipelines to implement an enhanced safety programme.

At present, Nicor Gas uses ArcGIS software to manage its natural gas distribution system. The company added Advantica’s Mains Replacement Prioritisation (MRP) application as a pre-emptive measure, thereby taking a proactive approach to the proposed distribution integrity rule. According to Energy Currents, several of Nicor Gas’s key objectives for improving its current risk management and mains replacement processes include simplifying the process by integrating or reducing data sources, implementing an industry-standard approach to mains replacement decision-making, and implementing a solution that would enable better decision-making in evaluating risk and mains replacement options.

MRP is an ArcGIS extension application that provides risk analyses and mains replacement decision support functionality. It uses the Environmental Systems Research Institute (ESRI) for data warehousing. By leveraging ArcGIS, MRP provides engineers with an integrated solution to Nicor Gas’s leak management system, ALARM, and employs standard ArcGIS functionality to thematically map and report on a wealth of data that serves to drive the company’s decision-making process.

The new streamlined process has made it easier for users to mine data and eliminated the company’s previous manual data collection processes. Pipe and leak information is now warehoused in a standard database and centralised for multiuser access. Moreover, when making asset replacement decisions about what assets to replace and when to replace them, Nicor Gas will have all facility data located in one place rather than spread across multiple applications. A centralised database with pipe conditions and ranking results combined with land base and other Nicor Gas asset information leads to improved decision-making by engineers who can easily see the entire picture at one go.

Financials

AGL Resources generates the majority of its operating revenues through the sale, distribution and storage of natural gas. In 2013, the company witnessed an 18 per cent increase in its operating revenues to $4,617 million. During this period, the net income of the company increased by 16 per cent to $331 million.

The way forward

In an important development, Nicor Gas received the approval of the Illinois Commerce Commission in July 2014 for a tariff allowing for the recovery of pipeline infrastructure investments across northern Illinois. The nine-year initiative, which begins in 2015, will accelerate natural gas infrastructure upgrades in Nicor Gas’s service territory. The tariff will allow the company to replace hundreds of miles of ageing distribution pipes, upgrade transmission and natural gas storage systems, and replace and refurbish natural gas regulating stations. The infrastructure investments for 2015 are expected to be $171 million.

Going forward, Nicor Gas plans to continue enhancing and upgrading the natural gas infrastructure in Illinois in order to meet the growing demand for the fuel as well as for delivering it to Nicor Gas’s 2.2 million customers in the region.

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