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What you need to know about alternative electricity suppliers

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, 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. Still,  many customers want at least the opportunity to shop–you just have to look out for the pitfalls. 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 during high-priced times. 

While CUB has encountered a disturbing number of energy rip-offs peddled door-to-door, over the phone or via mail, consumers seem to have better luck with another kind of energy choice: “municipal aggregation.” Check if your community has a “municipal aggregation” deal. That’s when community leaders negotiate with an alternative supplier for the purpose of securing a reasonable electricity price. Savings aren’t guaranteed, but your community may have secured a lower supply rate than your utility. (Read what the state of Illinois says about municipal aggregation, and check out the list of community power deals.) If your community does have an aggregation offer, find out when it expires, so you can prepare for that day. 

If you do choose to shop alternative supplier offers, here are CUB’s tips to make sure you’re getting the best deal 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. On the electricity side, see if your community has negotiated a “municipal aggregation” power deal that’s lower than the utility’s supply rate.
  • Make sure the offer is not an introductory rate that ends in a month or two. And if it is, find out when it ends and what the new rate will be.
  • Scan the fine print for hidden monthly fees. Also, if it’s a low fixed rate, check the fine print to see if the company allows itself to change the rate during certain market conditions.
  • Be careful of multi-year deals. The utility’s price changes a few times a year so you don’t want to get locked into a long-term deal that goes sour a year or two into it.
  • If you want to sign up, watch your bill carefully. Be prepared to get out of the offer if you notice it stops saving you money– you should be able to get out with no penalty.

Check out CUB’s alternative supplier pages, for both gas customers and electric customers, to see current utility prices, info on specific suppliers and more.

Remember, electric choice isn’t just about alternative suppliers. You have a lot of choices when it comes to clean energy programs that can cut your bills, such as energy efficiency incentives, “demand response” programs and solar offers. Clean energy programs, and not alternative suppliers, are the most effective ways to cut your bills.