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Ballooning bills, silent customer service: CUB joins ICC probe into three alternative suppliers

The Illinois Commerce Commission (ICC) is investigating three alternative suppliers–Realgy, Liberty Power and Switch Energy–after receiving hundreds of complaints from consumers about  marketing techniques, unresponsive call centers and an unusual Realgy fee that has caused bills to skyrocket overnight.

CUB’s legal team is intervening in the cases. These companies are but the latest to cause frustration among customers who have the option to switch from their electric or natural gas utility to an alternative supplier.

“We’ll fight for the best possible outcome for consumers, whether that’s financial benefit or forcing the companies to reform the way they do business,” said Julie Soderna, CUB’s general counsel. “We will carefully monitor the ICC investigation and participate in any enforcement stage of the proceedings.”

While competition has generally saved money for commercial customers, residential customers have typically been battered by  misleading marketing and bad deals. In fact, residential customers in Illinois have now lost more than $1 billion to alternative electric suppliers since 2015.

In February this year, the ICC’s Consumer Services Division fielded a single complaint about Realgy. But a month later, the department filed more than 100, and by April they were managing multiple complaints each day. Most focused on a new Real Time Settlement (RTS) charge that has caused consumers’ bills to skyrocket. One commercial customer reported a $19,867 RTS charge, and a residential electric customer was surprised by a $372 charge.

Realgy claims the RTS charge stems from the extreme winter weather that hit most of the country this past February. The latest polar vortex caused natural gas pipelines and wellheads to freeze, limiting supply across the country. (Update: On Friday, April 30, CUB learned that Realgy has suspended all collection of or billing for the RTS charge. And the company is adjusting invoices to reduce RTS billed amounts.)

Here’s what the company says about the origins of the RTS charge: During the extreme weather, BP, which provides natural gas for Realgy, declared a Force Majeure event, meaning that because of the unforeseeable weather conditions, BP said it was unable to fulfill its contract with Realgy and was unable to provide the promised amount of natural gas. (In cases of extreme weather, as in February and the polar vortex of 2014, there’s always the chance a company will declare Force Majeure and create difficulties for customers in the competitive market.)

At the same time, the utility Nicor required alternative suppliers to input extra natural gas to balance the system. If an alternative supplier failed to do so, it would face financial penalties from Nicor.

Because BP could not fulfil its contract with Realgy, the alternative supplier was unable to accommodate Nicor’s request and was penalized by the utility. Realgy then passed these fees on to their customers through the RTS charge.

However, Realgy’s explanation does raise questions. Although the company says this is a problem related to Nicor and natural gas, why did Realgy also add the punishing RTS charge to electric bills? And why did Chicago customers, who don’t live in Nicor territory, also get hit with extra charges?

CUB has also received a number of complaints about Realgy:

A nonprofit healthcare facility in Kankakee County expected a February gas bill of about $3,500, but instead  were charged quadruple that–about $16,000. An Evanston customer who saw his Realgy bill jump by over $2,000 from January to February couldn’t reach a company representative. The Evanston man’s only hope was to leave a message with an answering service. (Realgy’s customer service is also under scrutiny.)

Like the Evanston customer, others have been unable to reach anyone at Realgy to discuss their bills or resolve their complaints. And others were threatened with termination fees, despite the state’s prohibition of alternative supplier termination fees as of Jan. 1, 2020.

Extreme cases like this are a good reminder to take care when shopping in the electric and gas markets. For example  make sure to get a copy of the contract, read through it carefully, and then keep it in a safe place. And always read your bills carefully, no matter if you’re with an alternative supplier, or if a regulated utility supplies you with electric and/or gas.

In addition to Realgy, state regulators are also investigating alternative suppliers Liberty Power and Switch Energy. Among other things, Liberty is being investigated for potential violations of its marketing practices and customer call center operations.

Complaints about Switch Energy also focused on customer call center operations and sales and marketing practices. (Read about CUB General Counsel Julie Soderna’s run in with Switch.) Even after the ICC issued a notice of apparent violation, consumers reported that calls to the supplier’s customer service line are met with a “mailbox full” message and customers are unable to leave a message.