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Alt. gas suppliers on the rise, and they appear to be violating the HEAT Act

Although many alternative gas suppliers peddle bad deals, their numbers were on the rise in 2019, the Illinois Commerce Commission (ICC) reported in its annual assessment of natural gas competition. The report, compiled by the ICC’s Office of Retail Market Development, also revealed that a number of supplier offers as listed on the ICC’s website disclosed termination fees that would be illegal under a new consumer protection law that went into effect this year.

Alt Suppliers on the Rise

Statewide, the number of alternative gas suppliers went up in 2019. With 83 alternative suppliers actively serving customers last year, consumers had plenty of choices. However, these choices are too often bad deals. Past analyses by CUB have shown that the overwhelming majority of offers were money-losers. (The same is true in the electric market. According to the ICC’s partner report about electric suppliers, residential customers have now lost more than $1 billion to alternative electric suppliers in the last 5 years.)

NOTE: The ICC does not regulate the price of natural gas charged by alternative suppliers–they can charge whatever they want. Your gas utility, however, is required by law to pass the cost of gas onto you without a markup. It’s likely that your utility is the best bet.

The number of customers choosing to receive their gas supply from an alternative supplier increased as well in 2019. According to the report, alternative gas suppliers had 316,174 residential customers last year, a boost of about 10,000 customers since 2018. And 46 percent of natural gas in the state was supplied by alternative suppliers in 2019, compared to 45 percent the previous year.

Violating the Heat Act

The ICC assessment also reported that several supplier offers as reported on the ICC website are in violation of the Home Energy Affordability and Transparency (HEAT) Act, one of the nation’s toughest consumer protection laws to fight rip-offs.

The act, which went into effect Jan. 1, 2020, eliminates termination fees for residential and small commercial customers of alternative gas and electric suppliers. However, many offers listed on the ICC’s website still mention early cancellation fees. 

“The responsibility of updating offerings on the ICC website and removing outdated information, such as early termination fees, falls on the (alternative gas supplier),” the report said, ”however, a number of AGS have failed to update the terms and conditions of these offers.”

Winter Worries

Crain’s Chicago Business reports that winter bills for Peoples Gas, which serves Chicago, will be up 15 percent from last winter. Nicor Gas reports bills will be up about 2 percent this winter. Across the Midwest, the Energy Information Administration (EIA) says average natural gas bills could be about 8 percent higher than last winter. Over the winter season, EIA predicts gas-heating consumers will spend about $550 to heat their homes.

As we head into winter, be sure to check your bills to ensure you’re not being ripped off by an alternative supplier. If you’re not sure where to look, check out our handy how-to guides, one for Nicor Gas customers and one for Peoples Gas/North Shore Gas customers. (Ameren customers don’t have gas choice at this time.)