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.
- 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.
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.