Consumer groups seek to curb abuses by unregulated electric suppliers

ALTON —A coalition of consumer advocates on Wednesday called for the General Assembly to curb what they called abuses by unregulated electric suppliers that peddle offers door-to-door, over the phone or via mail.

In news conferences across the state this week, including in Alton, AARP Illinois and the Citizens Utility Board asked residents to visit CUBActionCenter.com, where they can get tips on how to avoid bad deals and send a message to their legislators urging them to clean up the electric market.

ComEd and Ameren Illinois customers can choose a company other than the regulated utility to supply their electricity. If a customer chooses another supplier, those charges are included on utility bills.

But consumers often complain about confusing offers, misleading marketing, and rip-offs that are double the supply rate offered by the regulated utility. In fact, customers of alternative electric suppliers lost a record total of $197.8 million from June 2016 through May 2017, which eclipsed the $125.8 million in losses the previous year, according to a report by the Illinois Commerce Commission Office of Retail Market Development.

While the ICC has taken steps to address the problems, consumer advocates said even stronger reforms are needed to stop a wave of electric rip-offs. They called for three key reforms:

Ban automatic renewal of contracts. Customers often complain that their rate with a supplier skyrocketed after the offer they originally signed up for was automatically renewed at a significantly higher rate. Offers should only be renewed if a customer opts in to the new offer, consumer advocates said.

Mandate that the utility’s “price to compare” be displayed on all bills. The utility’s price to compare is the rate against which all supplier deals should be judged. Currently, that price is not clearly or prominently displayed on electric utility bills—and it is not on the bill if a customer is signed up with a supplier. All utilities should be mandated to do this.

Forbid suppliers from hiding their charges on utility bills. Under current rules, alternative electric suppliers are allowed to include their charges on utility bills. However, that makes it difficult for customers to spot bad deals. House Bill 5101, sponsored by Rep. Marcus C. Evans, Jr. of Chicago, would require suppliers to send their own bills to customers if they market door-to-door, via mail, or over the phone.

“I am serious about protecting Illinois consumers and keeping utility costs down for the working-class citizens of Illinois,” Evans said. “Utility services such as electric and gas are essential means of living. Access to fair-priced utilities is not a privilege, but is a right and needs to be protected.”

“Consumers across Illinois are getting ripped off by alternative electric suppliers who can hide behind major utility companies,” said Bob Gallo, AARP Illinois State Director. “It’s time to bring some transparency to the process and give consumers the chance to make reliable, transparent, informed decisions about their utility services. Illinois consumers deserve better.”

“Nobody wants to get ripped off,” CUB Executive Director David Kolata said. “These common-sense reforms are urgently needed because they will protect customers from bad deals and make the market stronger.”

Since 2010, consumers across Illinois have been able to choose a company other than the regulated utility to supply their electricity. CUB has seen consumers paying alternative supplier prices that are significantly higher than the utility rates. In 2017, the consumer watchdog fielded hundreds of complaints or questions from Illinois consumers about alternative suppliers, and this year the watchdog continues to get a steady stream of calls.

Consumer advocates stressed that their reform campaign is not targeting “municipal aggregation” offers—electric deals negotiated by community leaders on behalf of their residents—but bad deals peddled door-to-door, via telemarketing or by mail.

CUB gave tips on how customers can avoid scams if shopping in the market, or approached by a supplier.

1) Be careful about people at the door who say they’re from the “electric company” and offer to lower bills. Customers should not give out their account number or bill unless they’re absolutely sure they want to sign up for an offer. A dishonest sales representative who gets a customer’s account number can then sign up that person for an alternative supplier without permission.

People who live in communities with municipal aggregation deals should beware of marketers going door-to-door who say they are affiliated with a community power deal. Municipal aggregation companies won’t go door-to-door. This could be a trick to sign up customers for another offer.

2) Find out what the company is charging and how that compares with the utility’s price. Ask whether it’s a fixed rate, and for how long, or a variable rate that changes on a monthly basis.

3) Ask if the rate is an introductory rate, how long it lasts and what the new rate will be. CUB receives a lot of complaints from people who say the low price they signed up for disappeared after a certain period and their bill skyrocketed.

4) Ask if there is a monthly fee. CUB has seen fees as high as $9 a month. That will increase the per kilowatt-hour price.

5) Ask if there is an exit fee to leave a plan before the contract is up. Consumers don’t have to pay a penalty if they cancel a contract within 10 days of the supplier’s charges first appearing on a bill.

CUB is Illinois’ leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $20 billion by helping to block rate hikes and secure refunds. For more information, call CUB’s Consumer Hotline at 1 (800) 669-5556 or visit www.CitizensUtilityBoard.org.