ARES Archives | Citizens Utility Board

ICC stats: IL consumers have lost $1.6B with alternative suppliers since 2015, but Ameren customers saved last year

Elizabeth — Fri, 22 Sep 2023 16:07:18 +0000

Illinois consumers have lost about $1.6 billion total to alternative suppliers since 2015–but Ameren customers, for a change, saw some savings last year, according to a review of annual reports from the Illinois Commerce Commission’s Office of Retail Market Development (ORMD). Under Illinois law, ComEd, Ameren and MidAmerican customers are able to choose an alternative electric supplier, including offers that companies pitch to individuals as well as community power, a.k.a. “municipal aggregation,” deals. See CUB’s resources, including this tips blog on electric competition, specific information for people in ComEd and Ameren territories, as well as our fact sheet on municipal aggregation offers and our new review of current aggregation offers. ORMD, the ICC’s office that focuses on electric competition, recently released its 2023 annual report. During the time that was covered, June 1, 2022 through May 31, 2023, Illinois consumers were slammed with high utility power prices due to a number of factors, including Russia’s invasion of Ukraine. Here’s an overview of how consumers fared over the past year: On average, residential customers with alternative suppliers in ComEd territory paid an average of about $6.89 million more per month (or an average of about 1.74 cents more per kilowatt-hour), compared with ComEd’s supply price. Because of the spike in utility prices, the overall losses for ComEd customers with a supplier were lower than what they were in previous years. In Ameren territory, the numbers tell a vastly different story. That’s because unlike in ComEd territory, where about 36 percent of alternative supplier customers were on municipal aggregation plans, about 72 percent of supplier customers in Ameren territory were on aggregation offers from June 2022 through May 2023. Many of those plans predated the spike in power prices, and, thus, secured big savings for consumers who were spared an Ameren supply rate that doubled during that period. In the Ameren territory, residential customers with alternative suppliers saved on average around $5.52 million per month (or an average of about 1.435 cents per kWh), compared with Ameren’s supply rate. The highest supplier rate reported in Ameren territory was a variable rate of 30.75 cents per kWh in October 2022. (Variable means the rate can change monthly.) The highest rate in ComEd territory was a variable rate of 39.1 cents per kWh in May of 2023, according to the report. 2023 also saw a 15.8 percent decrease in total Illinois residential customers served by an alternative supplier. The report showed 1.12 million Illinois residential customers on alternative supplier plans, compared with 1.33 million the year before. While customers saved in the early years of electric choice in Illinois, the numbers have been dismal since 2015. In fact, the Ameren savings marked the first time in recent years that customers have saved money with alternative suppliers. Overall, even when counting last year’s savings, Ameren customers have lost about $500 million with suppliers since 2015, and ComEd customers $1.1 billion. Here’s a yearly breakdown: Total Losses, ComEd customers Total Losses, Ameren customers June 2015-May 2016 $115,204,320 (lost) $10,632,844 (lost) June 2016-May 2017 $152,108,081 (lost) $45,856,434 (lost) June 2017-May 2018 $138,243,088 (lost) $89,344,091 (lost) June 2018-May 2019 […]

The post ICC stats: IL consumers have lost $1.6B with alternative suppliers since 2015, but Ameren customers saved last year appeared first on Citizens Utility Board.

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 […]

The post What you need to know about alternative electricity suppliers appeared first on Citizens Utility Board.

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 […]

The post What’s the difference between ARES plans and Community Solar? appeared first on Citizens Utility Board.

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 […]

The post Energy rip-offs have hit low-income communities hard, but here’s another reason the HEAT Act gives us hope appeared first on Citizens Utility Board.

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.

The post HEAT Act would protect consumers from predatory alternative suppliers appeared first on Citizens Utility Board.

CUB, AARP Illinois call for sweeping reforms of electric and gas markets in Illinois

Jim Chilsen — Fri, 06 Apr 2018 12:52:45 +0000

This week, CUB held news conferences across the state (Chicago, Rockford, Peoria, Alton and Champaign) calling on the General Assembly to pass sweeping reforms to protect customers from a wave of electric and gas rip-offs that we have seen in the market over the last few years. These are some of the sad stories we’ve seen: In Skokie, a woman was on a plan that charged her double for electricity. “Grateful for your work,” she said, after we met her at a utility bill clinic and alerted her to the bad deal. At a utility bill clinic in Bethalto we found a consumer chained to an alternative electricity supplier rate that was at least 55 percent higher than the utility rate. A Chicago-area man saw his rate with an alternative gas supplier triple the utility rate, overcharging him by hundreds of dollars. “To me that’s price-gouging,” he said. This is a significant statewide problem, and we need Illinois legislators to pass sweeping reforms to protect seniors and families from overpaying by potentially hundreds, even thousands of dollars. The energy companies have a lot of lobbyists and money, but we have YOU. Please, send a message to your representatives: Enough is enough. Clean up Illinois’ energy markets!

The post CUB, AARP Illinois call for sweeping reforms of electric and gas markets in Illinois appeared first on Citizens Utility Board.

Electric competition: Not the money saver it once was

Jim Chilsen — Wed, 22 Jul 2015 16:28:49 +0000

The times are a’changing. When electric competition began in northern Illinois, it seemed like a sure bet for savings. ComEd’s price at the time was high and electric customers could easily find deals by shopping the market of unregulated suppliers. But the era of easy savings is over, for now, in northern Illinois, as confirmed by a recent report from the Illinois Commerce Commission’s (ICC) Office of Retail Market Development. From May 2014 to May 2015, ComEd customers saved $73.4 million more than those who signed up with an alternative electric supplier, the ICC reported. This is a far cry from the state of the electric market just two years ago, when using an alternative electric supplier saved customers $257.5 million. Back then, ComEd was locked into much higher rates. Once those contracts expired in 2013, ComEd’s rates became more competitive with alternative suppler offers. Savings between ComEd and alternative suppliers have been converging ever since. (This year’s ICC report focuses on savings in ComEd service territory. Information on Ameren territory should be released in next year’s report.) The report contained some other interesting findings on the state of the electric retail market in Illinois: Currently, 85 alternative electric retail suppliers are authorized to sell in Illinois 79.5% of the total electric usage of ComEd’s customers was provided by alternative retail electric suppliers this year (down from 81% last year) As of May 31, 2015, more than 2.7 million residential customers across the state receive their power from an alternative electric supplier (down about 291,000 from a year prior) It is expected that next year, the number will drop even further as 700,000 Chicago households will return to ComEd, after the City announced it would not continue its municipal aggregation program with Integrys Energy Services (now owned by Constellation Energy). Just under 70% of residential alternative electric supply customers were part of a municipal aggregation program, where local government negotiates an electric supply deal on behalf of all residents. However, of the 743 communities who have passed an aggregation referendum, 121 have chosen not to continue their programs as of June 2015. While the number of communities engaged in municipal aggregation has gone down, the number of individuals choosing an alternative supply offer has risen. Of the residential offers posted on PluginIllinois.org for ComEd customers, 76% were fixed offers, with prices that stay the same for the length of the contract, and 21% were variable offers, which change from month to month. Because savings are no longer guaranteed, it is more important than ever to be a savvy shopper if you are in the market for a new electric supplier. Always compare any alternative supply offer to the regulated utility—and be sure to look for any hidden monthly fees or exit fees that could make the deal less attractive. Also, be wary of promotional rates, which disappear after a short time. Always check to see if your rate is a variable price that can change unpredictably from month to month. For more information on alternative electric supply offers in Illinois, check out CUB’s weekly-updated fact sheets. (ComEd customers can click here, Ameren customers can click here.)

The post Electric competition: Not the money saver it once was appeared first on Citizens Utility Board.