alternative electric supplier Archives | Citizens Utility Board

CUB analysis: Read alternative supplier offers carefully (and watch for red flags)

Elizabeth — Sun, 18 Feb 2024 00:52:41 +0000

Have you received an envelope in the mail that at first glance looks like it could be an urgent message from your utility company? Be careful: It could be another alternative supplier offer. Such a mailing can be common in Illinois and other states with competitive electricity choice. But here’s why you need to be careful. Since 2015, Illinois consumers have lost more than $1.6 billion to alternative electricity suppliers, according to CUB’s review of reports from the Illinois Commerce Commission’s Office of Retail Market Development. A couple of CUB staffers have reported getting supplier marketing in the mail–this one is from Clean Choice Energy. If you do get an offer, it’s up to you whether to sign up. Read the fine print carefully, and watch for these possible red flags: The envelope displays the name of your utility and includes urgent messaging (IMPORTANT ENERGY UPDATE, CONFIRMATION REQUESTED, etc.). Consumers enrolled with e-billing will know that this is not their utility’s typical contact method, but this mailing could be more confusing and concerning if you usually get paper bills. An envelope listing “Utility Company: ComEd” and “Enclosed: Authorization Form” can confuse consumers into thinking it’s an official note from their power company. In this case, you can see that the mailing is from a third party–a company other than your utility. The pitch sounds like clean energy is being pumped into your home. On a letter displaying an all-caps heading (IMPORTANT NOTICE ACTION REQUESTED), the mailer proclaims “Get 100% clean, pollution-free energy.” The initial advertising may sound like you’re getting clean energy directly pumped into your home. But this isn’t the case. Short of having a solar installation on your roof, nobody can control the sources of their electricity. When you sign up for a “green offer” from an alternative supplier, you are buying “renewable energy credits.” That means the clean energy you are paying for is being added somewhere on the grid, probably not your TV or microwave. And unless it expressly says so, that clean energy isn’t guaranteed to be from a solar or wind farm in your state. If you’re motivated by clean energy, a better bet is most likely subscribing to a community solar program, so you’ll save money and help reduce pollution in your community. Note: CUB isn’t opposed to people shopping for green plans, we just hate to see people paying for needlessly expensive ones. Your community may offer a municipal aggregation deal with a more reasonably priced clean energy offer. High price. What’s the rate being advertised and how does it stack up to your utility’s price listed on CUB’s electric page? In this example, when you get past all the talk about rewards and 100 percent clean energy, CUB found on the backside of the letter that you would get charged a rate fixed for 12 months that was about 60 percent higher than ComEd’s rate at the time. (If the price does seem reasonable, watch for seemingly low introductory rates that skyrocket after a brief period. Always ask if the price you’re being offered is a promotional rate.) Automatic renewal. The offer in […]

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What you need to know about alternative electricity suppliers

Elizabeth — Fri, 30 Jun 2023 13:00:14 +0000

During the summer months when electricity bills are on the rise, many consumers wonder if they should switch to an alternative supplier to cut down on their bills. But beware, these enticing offers are usually not as good as they seem. Illinois electric customers have lost more than $1 billion to alternative electric suppliers since 2015. Last summer, even with utility prices high, Crain’s Chicago Business reported the average customer with an alternative supplier paid about $10 more per month than ComEd customers. So it’s likely that the utility, Ameren or ComEd, is your best bet when it comes to supply. There are two general alternative suppliers offers in Illinois: Offers pitched to you over the phone, via letter or door-to-door. These marketed offers tend to be risky. A company may offer a low introductory rate that will skyrocket after a short period. Also, be wary of add-on fees that can raise the cost of the plan. If a company offers a lower fixed supply price, find out if it can declare “force majeure” and back out of the deal. It’s happened before. A “municipal aggregation” offer that your community leaders negotiate with an alternative supplier. If you are on a community power deal, confirm what price you’re paying. It’s possible your community may have secured a lower supply rate than your utility, but savings are not guaranteed. And we’ve seen examples of aggregation offers with higher rates than the utility. (For example, read about Peoria’s offer.) So if you’re on a municipal aggregation deal, find out what rate you’re being charged and for how long. (Read what the state of Illinois says about municipal aggregation, and check out the list of community power deals.) CUB’s tips to avoid bad deals and pay the lowest price possible: Know the utility supply rate and how it compares to the offer. ComEd and Ameren customers can find their rates on CUB’s Electric landing page. See if your community has negotiated a “municipal aggregation” power deal, and confirm the price and how it compares with the utility’s supply rate. It’s possible your community has negotiated a lower rate, but don’t assume that. Verify. Here are the supply rates (also called the “price to compare”) for ComEd and Ameren. Be wary about showing your bill to just anybody. If somebody comes to your door and says they want to look at your electricity or gas bills, don’t hand it over OR give out your account number, unless you are absolutely sure you want to sign up. A sales rep who sees your bill can get your account number and sign you up for a deal without your permission–a scam called “slamming.” Any decision you make about your utility bills is important, and you don’t have to make it on your doorstep. Don’t give out any sensitive info, even if the person at the door claims to be from the utility company. Instead, ask where you can get more information about the offer and end the conversation. Make sure the offer is not an introductory rate that ends in a month or two. And if it […]

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What’s the difference between ARES plans and Community Solar?

Elizabeth — Tue, 09 May 2023 18:59:27 +0000

By Marina Minic, CUB Solar Programs Administrator As we hold hundreds of events across the state, consumers sometimes ask us: What’s the difference between an alternative supplier offer and a relatively new option called Community Solar? The offers can sound deceptively similar, but there are big differences–and you should know them so you can make the choice that’s right for you. Read our Q&A: What are alternative retail electric suppliers (ARES)? Most power bills are split up into supply, delivery and taxes and fees. Traditionally, a utility will charge you for the power you use (the supply) and the cost of delivering it to you (delivery). Investor-owned utilities like ComEd, Ameren, and MidAmerican are not allowed to profit off of the supply section. If you are a customer of one of those companies, you are able to choose who your electric supplier is. You can either stick with ComEd/Ameren/MidAmerican, or you can go with an alternative supplier. These suppliers, called alternative retail electric suppliers (ARES), are authorized by the Illinois Commerce Commission (ICC) to offer various pricing plans. They market these offers over the phone and via mail, but also door-to-door and even at grocery stores and movie theaters. Warning: Consumers calling about deals peddled by these suppliers–often bad deals–are one of CUB’s top complaints/inquiries. In fact, since 2015, Illinois consumers have lost more than $1 billion to alternative electricity suppliers. ComEd/Ameren’s supply price is often the lowest option because it is illegal for them to make a profit off of what they charge you for supply. Alternative suppliers, on the other hand, can charge whatever they want. If you are considering an electricity offer, make sure to ask good questions and read the fine print before signing up. To learn more about electric competition, read our fact sheets for ComEd customers and Ameren customers. What is a green plan offered by an alternative supplier? Sometimes, alternative suppliers offer something called a “green plan.” They claim such plans supply you with renewable energy. So, customers looking to get their electricity from renewable sources may be tempted to sign up for a green plan. Warning: Signing up for a green plan does NOT mean renewable energy will be powering your home. In reality, these companies are purchasing renewable energy certificates (RECs) from renewable generation facilities, like solar or wind farms. There are a few potential concerns with green plans. Lack of transparency: Most ARES will not disclose information about the renewable generation facilities that they are purchasing RECs from. You may be told the generation type (like wind or solar), but they will often withhold information on where the facility is located, and how long ago it was built. This way, you have no way of knowing if your money is going to support a new renewable project, which is preferable, or if it is going to a facility that was built a long time ago and has already been paid off. High electric rates: Green plan customers often pay a relatively high rate, compared with the utility supply price. There is very little oversight of how these companies are spending […]

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Energy rip-offs have hit low-income communities hard, but here’s another reason the HEAT Act gives us hope

Celeste — Thu, 23 Jul 2020 16:17:31 +0000

At CUB, we get reports that customers enrolled with alternative suppliers have been charged double or triple (or worse) for their electricity—and marketers have long preyed on the neighborhoods that can least afford to pay high power bills. That’s yet another reason we’re dedicated to making sure a new reform law, the Home Energy Affordability and Transparency (HEAT) Act is enforced. Customers with alternative suppliers have lost about $800 million since 2015, according to the Illinois Commerce Commission (ICC). Too often we’ve seen alternative suppliers use deceptive marketing to lure customers into bad deals. Before the HEAT Act, a common scheme was to promise a cheaper fixed rate, then automatically renew the contract to a high variable rate without notifying the customer. And guess which families get hit the hardest by such tactics? In a presentation to the Illinois Commerce Commerce (ICC) in 2019, the state Attorney General’s office displayed the map on the right, which illustrated how Chicago neighborhoods with a poverty rate of 20 percent or more also had 20 percent or more of their homes signed up with an alternative supplier. Compare that to a wealthier neighborhood, such as River North, where only about 7 percent of the homes were signed up. The families who pay for these bad deals aren’t the only ones abused. A few years back, Crain’s Chicago Business did an expose showing how door-to-door salespeople, many of whom are also low-income, were lured into selling these bad deals with the promise of a higher income and housing. Instead, they had to work 12-hour days knocking on strangers’ doors and had their lodging expenses taken from their sales commissions. Rip-offs from alternative electric and gas suppliers are why Attorney General Kwame Raoul, CUB and other consumer advocates worked to pass the HEAT Act, one of the nation’s toughest laws against such bad deals. The HEAT Act was passed unanimously by the Illinois General Assembly and it took effect on Jan. 1, 2020. The new law features a long list of consumer protections, such as prohibiting alternative suppliers from automatically renewing a contract from a fixed rate to a variable rate, and then jacking up the price. Most importantly for low-income consumers, the HEAT Act makes it extremely difficult for suppliers to slap high rates on households getting energy-payment assistance through the Low Income Home Energy Assistance Program (LIHEAP) or a utility-run assistance program. Under the new law, if an alternative supplier tries to enroll a LIHEAP customer, the account will be flagged during the switching process and the switch won’t be completed. There are two exceptions: LIHEAP customers could still be signed up for a supplier through a Municipal Aggregation Program, which is a power deal that is negotiated between a municipality and an alternative supplier. Suppliers could go to the ICC to get approval for a guaranteed-savings plan to offer LIHEAP customers. (As far as we know, suppliers have not been breaking down the doors of the ICC to offer “guaranteed savings” plans.) Bryan McDaniel, CUB’s director of governmental affairs, described a LIHEAP recipient he met at a CUB utility bill clinic a few […]

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HEAT Act would protect consumers from predatory alternative suppliers

Megan — Tue, 23 Apr 2019 22:40:19 +0000

Today CUB joined Illinois Attorney General Kwame Raoul and other consumer advocates urging the General Assembly to pass legislation to protect consumers from predatory practices and high costs from alternative energy suppliers “This legislation would right some of the wrongs in the alternative supplier industry,” said Bryan McDaniel, CUB’s Director of Government Affairs. Senate Bill 651, the Home Energy Affordability and Transparency (HEAT) Act, would begin addressing the scams and ripoffs from alternative suppliers that have overcharged Illinoisans by more than $551 million just since 2015–with low-income communities, communities of color, and seniors bearing most of the burden of that lost money. At today’s press conference, speakers noted that almost every alternative supplier customer loses money compared to what they would pay with the regulated utility; almost no one ends up saving money. The HEAT Act would require suppliers to notify consumers before their rates rise and obtain their consent before renewing their contract. McDaniel noted that a contract renewal with alternative suppliers sometimes consists of only a postcard notification, and then the customer gets switched to a variable rate where their costs double, triple or even quadruple. The legislation would also require alternative suppliers to show the utility’s price along with the rate they are selling to avoid false claims of lower rates. “If I asked you what a gallon of gas cost, you could tell me, because you see those prices everywhere. If I asked you what a kilowatt-hour (kWh) costs, or a therm cost, you might not know. I wouldn’t know if I didn’t work at CUB,” McDaniel said. (By the way, ComEd’s current price is 7.219 cents per kWh. Ameren’s price is 5.026 cents per kWh for the first 800 kWhs of usage in a given month, and 4.367 cents per kWh for usage beyond that.) The HEAT Act would prevent high rates from alternative suppliers from sucking up limited public energy assistance funds, such as LIHEAP (Low-Income Home Energy Assistance Program) and PIPP (Percentage of Income Payment Plan), and it would require suppliers to report their rates to the Illinois Commerce Commission (ICC) and Attorney General Raoul. To help protect yourself and all Illinois consumers against alternative supplier scams, contact your legislators in the General Assembly and tell them you want better consumer protections against alternative suppliers.

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Watch your wallet: Electric/gas scammers prey on Illinois consumers

Megan — Tue, 17 Oct 2017 23:36:16 +0000

Be on high alert if someone approaches you with a utility “discount” that’s too good to be true: CUB is constantly getting complaints about alternative electric and gas suppliers using predatory sales tactics. Most customers in Illinois can choose a company other than the regulated utility to be their electric or gas supplier. But Illinois’ market has been confusing and plagued by rip-offs. Since January, CUB has handled 526 complaints and inquiries about alternative suppliers, a slight uptick compared to the same period last year. “Unscrupulous alternative suppliers don’t discriminate and will try to switch anybody, but they are particularly predatory when it comes to seniors and low-income residents,” said Scott Allen, CUB’s Environmental Outreach Coordinator in Hillsboro. In addition to knocking on your door or calling you on the phone, suppliers also market Illinoisans at grocery stores, airports, even the movie theater. Some communities, including Naperville, Decatur, and Peoria, have issued warnings, the Chicago Housing Authority has banned alternative suppliers from their properties, and Illinois Attorney General Lisa Madigan filed a lawsuit against one alternative power supplier in August for “aggressive” and “deceptive” sales practices. Am I with an alternative supplier? Here’s how to find out. Deceptive practices include sales reps posing as the regulated utility, switching a customer without his or her consent, failing to clearly disclose the terms of a contract, and offering incentives – such as gift cards and airline miles – without mentioning that the value of such incentives can be applied to termination fees. Scott warns that the regulated utilities will NEVER call you or knock on your door to pitch a “discount,” or ask to see your account number: “Legitimate agencies generally don’t come to your door, or ask for personal information over the phone.” Find more detailed information on making supplier decisions at CUBHelpCenter.com. The publication gives consumers tips on avoiding bad deals, an informational poster to warn neighborhoods of door-to-door rip-offs, and a chart that compares alternative supplier offers with utility rates. How do I evaluate alternative supplier offers? Don’t give out your bill, account number, OR your phone number unless you are sure you want to switch. If you do, an unethical marketer could use that information to switch you to an alternative supplier without your consent. Sales reps who approach you in person can use online lookup tools to get your utility account information using just your phone number. Ask about the price and how it compares to the regulated utility’s price. (Use CUBPowerCalculator.com.) Ask if the rate you are being offered is an introductory or promotional rate, and if so, when that rate will end and what the new rate will be. Ask if the rate you’re being offered has any fees tied to it, such as an exit fee or a monthly fee that will inflate the per-therm or per-kWh rate. Always take a few days to consider the fine print, and call CUB at 1-800-669-5556 if you have questions. If you change your mind or believe that you signed a bad contract, cancel it as soon as possible. By law customers are allowed to leave a […]

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So what the heck is a green plan?

Jim Chilsen — Fri, 05 May 2017 11:42:51 +0000

At CUB we get a lot of calls from consumers who have questions about renewable energy plans that get pitched to them by alternative suppliers. These “green plans” are a legitimate choice, but some people have complained about exorbitant rates. If you’re shopping in the market, you should have all the facts. Generally, there is some confusion over what a “green” plan actually is. Signing up for green energy does NOT guarantee that energy from renewable sources—wind and solar farms—is being pumped into your home. There’s just no easy way to determine if the electricity you’re constantly consuming is coming from a wind turbine, a nuclear plant, a coal plant or any of the thousands of sources of power. Instead, signing up for a “green” offer means that you’re purchasing Renewable Energy Credits (RECs). So, for example, if you’re on a 100 percent renewable energy plan, it means that for every kilowatt-hour (kWh) of electricity you use, the same amount of renewable energy is being added somewhere on the grid—not necessarily to your microwave. Also, remember that a green plan doesn’t have to be 100 percent green. For example, if you signed up for a “50 percent green” plan and used 1,000 kWh of electricity in a month, you would claim the environmental benefits of adding 500 kWh of renewable electricity somewhere on the power grid. (Read CUB’s fact sheet on green plans.) If you’re considering such a plan, make sure you have full details on the pricing: How does the green plan compare to the utility’s rate? You’re likely to pay a premium for a green plan, but there’s a wide range of prices. CUB checks alternative supplier rates, including green plans, on a weekly basis. You can get that price list here. Is the price expected to change? Ask if the plan is a variable rate that could go up each month, and if the price you’re quoted is an introductory rate that will go up after a short period. Is there a monthly fee connected to the plan? That will inflate your advertised rate. Don’t forget that the regulated utilities have green power too. The state’s Renewable Portfolio Standard (RPS) requires Ameren and ComEd to supply a certain percentage of renewable energy (25 percent by 2025). RECs are purchased to help Illinois utilities comply with that law. Finally, don’t think you have to pay more for electricity with a green plan to do good for the environment. The best way to help the planet and your pocketbook is by reducing your electricity consumption (energy efficiency!) and/or moving your electricity demand to off-peak hours. Here are some optional programs to do that: Peak Time Savings (offered by ComEd) and Peak Time Rewards (offered by Ameren) are no-cost programs that allow people with new digital electric meters to get a bill credit for reducing their energy usage during certain summer days. By reducing power usage during peak hours (usually hot summer afternoons), consumers can get a financial benefit, and they help reduce the need to run expensive, high-polluting power plants. Hourly Pricing (ComEd) and Power Smart Pricing (Ameren) charge you an hourly rate for […]

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Urgent: Stop bad power deals

Samantha — Fri, 28 Apr 2017 20:39:33 +0000

Over the last couple of weeks, the CUB Action Network has sent thousands of messages against AT&T’s plan to kill traditional home phone service, as well as plans from Nicor and ComEd to hit customers with a total of $300 million in rate hikes. And today, we ask that you take action on another front: Bad electricity deals. You may remember that state regulators are finalizing new rules to protect consumers against misleading marketing. That’s good, but unregulated electricity suppliers are trying to derail those new rules. We can’t let that happen. How bad is the problem? At a recent clinic we found people paying alternative supplier rates that were 74-93 percent higher than utility prices! 12.19 cents/kWh 11.4 cents/kWh 10.49 cents/kWh 10.2 cents/kWh Please urge state regulators to reject any attempts by alternative suppliers to weaken these new rules.

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Big ICC ruling for electric shoppers

Samantha — Tue, 27 Sep 2016 11:30:08 +0000

The Illinois Commerce Commission (ICC) took a big step in improving the power market, proposing new rules to protect consumers against misleading marketing. CUB and other consumer advocates applaud the new rules. For about two years, we have been calling for tougher rules to prevent misleading and confusing marketing by alternative electric suppliers. (Read CUB’s statement and send a message to the ICC in favor of the new protections.) Over the years, CUB has heard horrifying tales of Illinois consumers being charged prices up to six times higher than the regulated utility. Some of those people didn’t even know they were with a power supplier until their bills skyrocketed. Last September, the ICC began a rulemaking proceeding (Docket No. 15-0512) with the goal of creating a more transparent electricity market. Thanks to Thursday’s vote that goal is now within reach. The reforms will ensure that working families and seniors are kept safe from high-pressure sale pitches, misleading marketing and rip-offs. The ICC reforms include: Prohibiting alternative suppliers from using a utility’s name and logo to market its products. Requiring suppliers to provide 12 months of pricing history for an offer. Requiring suppliers to send a separate written notice to customers when a variable rate will increase by 20 percent or more. Requiring supplier sales agents to go through a uniform training program, developed by ICC staff. Requiring suppliers to permit customers to cancel service without termination fees if the company cannot prove that the customer authorized the switch. Requiring suppliers to disclose the terms of renewed contracts. If the new terms differ from the existing contract, then a side-by-side comparison of the existing and new terms must be provided. Requiring suppliers to give notice in writing and by telephone that a contract will be renewed. While the vote is a huge step forward, the new rules will have to survive a lengthy review—so we can’t let up! Please, send a message thanking the ICC and urging it to give final approve.

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Special Report: 100+ Northern IL community power deals more expensive than ComEd

Jim Chilsen — Mon, 11 Apr 2016 12:11:15 +0000

CUB told CBS 2 Chicago that more than 100 community power deals in Northern Illinois are charging a higher price than ComEd. It’s another sign of how much Illinois’ electricity market has changed in just a few years, and, as CBS 2 reported, it’s a good reason to look at your power bill. In this market, there’s a good chance ComEd will be your best deal. Under state law, community leaders are allowed to negotiate an electricity price with an alternative supplier on behalf of their constituents. “Municipal Aggregation,” as it’s called, takes a “Costco” approach to buying electricity: Just as the wholesale chain secures lower prices for household items by buying in bulk, aggregation is designed to secure lower electricity prices through the collective buying power of a community’s residents. Community power deals have secured millions of dollars in savings for people, and a big reason is because ComEd was locked into higher priced electricity contracts in past years. Now that those contracts have ended it’s much more difficult for communities to secure significant savings for their residents. Here’s what CUB found during an April 1 review of PlugInIllinois.org, the state of Illinois’ electric choice website. *Number of municipal aggregation deals in northern Illinois: 273 (includes cities, townships, counties) *Number of municipal aggregation deals in ComEd territory that currently have prices higher than ComEd: 116 *The top five highest-priced offers: Aurora, Homefield Energy, 8.086, through August 2016 Mount Prospect, Homefield Energy, 7.935, through August 2016, then 7.499 through August 2017 Warrenville, Constellation Energy, 7.89, through August 2017 Justice, Constellation Energy, 7.89, through August 2017 Lanark, Homefield Energy, 7.852 through August 2016, then 7.245 through August 2017 There are still a lot of towns that have rates that are lower than ComEd. However, we’ve heard that more communities, such as Wilmette, will be joining the 66 that have already let their deals expire and have said goodbye to aggregation. CUB has a great free tool, the Power Calculator, that can help you compare your community power deal with ComEd’s rate over the last year. Check it out!

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