SecProbe.io

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Mail Stop 3561

				December 30, 2005

By Facsimile and U.S. Mail

Mr. Russ Strobel
Chief Executive Officer
Nicor Inc.
1844 Ferry Road
Naperville, IL 60563

		Re:	Nicor Inc.
			Form 10-K for the year ended December 31, 2004
			Filed March 1, 2005
			File No. 1-07297

			Northern Illinois Gas Company
			Form 10-K for the year ended December 31, 2004
			Filed March 1, 2005
			File No. 1-07296

Dear Mr. Strobel:

      We have reviewed your filings and have the following
comments.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
Please be as detailed as necessary in your explanation.   After
reviewing this information, we may or may not raise additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Nicor Inc. Form 10-K for the Year Ended December 31, 2004

Item 1. Business, page 3

1. Please indicate to us if any one supplier accounted for more
than
10% of your gas supply for the past three years.

2. Explain to us how revenue is calculated under your pipeline
transportation contracts.  We also note from your MD&A discussion
that transportation revenue has remained relatively flat.

3. We note your disclosure regarding the 10-year contract between
Nicor Gas and Horizon Pipeline which indicates that Nicor Gas had
contracted 80 percent of the pipeline capacity.  Explain to us
what
analysis was performed with respect to EITF Issue 01-8.

Other Energy Ventures, page 6

4. Explain to us in detail the nature of Nicor Enerchange.  In
this
regard, explain if this energy venture engages in gas trading, and
if
so explain how you are accounting for such transactions.
Furthermore, explain how Nicor Enerchange administers the Chicago
Hub
for Nicor Gas.  Specific examples would facilitate our review.  In
this regard, we assume such operations are unregulated, if not,
please clarify our understanding.  Also, explain how earnings or
losses from this portion of your business impact your regulated
rates
and your return on equity.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 14

5. Please explain why the revenue tax expense table does not agree
to
your Consolidated Statements of Operations for the years ended
2002,
2003, and 2004.

Consolidated Statements of Operations, page 38

6. Please explain to us in detail your equity method investment in
Triton Container Investments LLC.  Please be specific with respect
to
your ownership percentage and voting rights.  Furthermore, provide
to
us the tests of significance as required by Rule 1-02 of
Regulation
S-X.  Also, explain why the Triton equity investment income is
reported in your Corporate Segment as opposed to your Shipping
Segment.

Business Segment and Geographic Information, page 59

7. Explain to us why you believe the functional currency of
Tropical
Shipping is generally the US dollar.

Nicor Inc. Form 10-Q for the quarter ended September 30, 2005

Note 17. Contingencies, page 13

8. Provide to us an update with respect to the status of the
regulatory investigation regarding the performance based rate
plan.
If you should experience an adverse ruling explain how you would
account for this liability to ratepayers.

9. If applicable, please address the above comments in the future
filings of Northern Illinois Gas Company.

Northern Illinois Gas Company Form 8-K filed November 28, 2005

10. We note the decision by the Illinois Commerce Commission (ICC)
granting the company a base rate increase.  Explain to us
management`s assessment of the increase.  In this regard, we note
that certain revenue will be applied to the gas adjustment rider
instead of base rates.  Explain how this will impact your future
earnings, cash flows, and return on equity.  In short, provide a
detailed summary of the rate order including management`s overall
assessment of the rate increase given your current operating
expense
structure and liquidity needs.   In this regard, you previously
disclosed that you were seeking a rate increase of $83 million, as
opposed to the $54.2 million that was approved.  Explain to us
your
rate structure, for example, the percentage of your revenue that
is
derived from base rates, and all other material components.  It is
our understanding that base rates do not change despite changes in
actual earnings.  In this regard, explain to us how your actual
historical earnings have compared with approved equity returns and
if
this impacted the ICC`s decision for a lower rate increase.
Lastly,
provide to us a summary of your preliminary MD&A disclosure for
your
2005 Form 10-K.

```		```````````````````````````````````````````````Please
respond to these comments within 10 business days or tell us when
you
will provide us with a response.  Please furnish a letter with
your
responses to our comments and provide any requested supplemental
information.  Please understand that we may have additional
comments
after reviewing your responses to our comments.  Please file your
response letter on EDGAR as a correspondence file.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

		In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.

		If you have any questions regarding this comment, please
direct them to Robert Babula, Staff Accountant, at (202) 551-3339
or,
in his absence, to the undersigned at (202) 551-3841.  Any other
questions regarding disclosures issues may be directed to H.
Christopher Owings, Assistant Director at (202) 551-3725.

		Sincerely,

		Michael Moran, Esq.
		Branch Chief

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Mr. Russ Strobel
Nicor Inc.
December 30, 2005
Page 4

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