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Consumer losses from alternative electric suppliers exceed $1 billion

Illinois has reached a grim milestone in the history of electric competition in the state: Residential consumers have now lost more than $1 billion to alternative electric suppliers since 2015, according to a new report from the Illinois Commerce Commission (ICC). 

More than 1.67 million ratepayers are signed up with alternative suppliers, the report found, and they are likely paying too much for their  electric supply. In recent years, CUB has repeatedly warned  that the regulated utilities, ComEd and Ameren, are likely a customer’s best bet in the market. 

Electric competition has been around for about a decade in Illinois, and while it offered savings for a while, in more recent years, the market has been plagued by bad deals and misleading marketing. The annual report on competition, from the ICC’s Office of Retail Market Development, calculated substantial ratepayer losses by subtracting the utility rate from the price consumers paid per kilowatt-hour (kWh) with their alternative supplier.

Here’s a breakdown of the number:

Total Losses, ComEd customers Total Losses, Ameren customers
June 2015-May 2016 $115,204,320 $10,632,844
June 2016-May 2017 $152,108,081 $45,856,433
June 2017-May 2018 $138,243,088 $89,344,091
June 2018-May 2019 $124,183,586 $121,879,268
June 2019-May 2020 $144,506,896 $107,432,518
Utility Totals:  $674,245,971 $375,145,154
Grand Total:  $1,049,391,125

In terms of cents per kWh, residential alternative supplier customers paid about 1.79 cents more per kilowatt-hour than ComEd customers from June 2019 to May 2020, according to the report. Alternative supplier customers in Ameren territory paid about 1.66 cents more than those who had the utility as their supplier. 

To put it in perspective, a ComEd customer using 900 kWh of electricity each month would overpay by more than $16 a month — that’s almost $200 a year!

Although CUB has seen a wide range of customers victimized by bad deals, we’ve also seen how alternative suppliers prey on low-income households and seniors on fixed incomes.

CUB fields countless calls from consumers about misleading marketing and bad alternative supplier deals that charge consumers double, triple or even worse for their electricity. Such reports led Illinois to pass the HEAT Act, one of the nation’s toughest consumer-protection laws.

Among other things, the Home Energy Affordability and Transparency (HEAT) Act, effective Jan. 1, 2020, prevents alternative suppliers from automatically renewing a contract from a fixed rate to a variable rate (a rate that changes monthly) and then jacking up the price. It also makes it virtually impossible for companies to rip off customers receiving energy assistance. And the bill gives the ICC sharper teeth when dealing with alternative suppliers. Thanks in part to this provision of the act, the ICC fined alternative supplier LifeEnergy $1 million for marketing violations.

Even though the HEAT Act was a big victory, consumer advocates and regulators must work together to enforce it. Please sign CUB’s petition and urge Illinois officials to hold alternative suppliers like LifeEnergy accountable for their actions.

In the meantime, be your own best consumer advocate. To ensure you’re not signed up with an alternative supplier, you should check the supply portion of your electric bill — ComEd customers should view this instructional video. For Ameren customers, view this video.

If you are paying too much with an alternative supplier, call the company first to end your plan and switch back to your utility. If you don’t like how you’re treated, call CUB to file a complaint, at 1-800-669-5556.