Attorney General urges public utilities to inform customers of expensive price of alternative energy suppliers

 

[September 10, 2018] 

Attorney General Lisa Madigan sent letters to ComEd and Ameren urging the public utilities to include electric supply price comparison information on customers’ monthly utility bills to inform consumers about the true cost of enrolling with alternative retail electric suppliers (ARES).

Madigan’s letters urge the utilities to clearly disclose to customers who have switched to an ARES the price they are paying on their monthly utility bills as well as the comparison price that those customers would have paid if they had stayed enrolled in traditional utility service through ComEd or Ameren. Because ComEd and Ameren are responsible for billing customers for ARES service, Madigan said they should clearly inform customers about the real cost of switching to ARES service.

“People in Illinois who switch to an alternative electric supplier almost always pay higher prices,” Madigan said. “Providing Illinois residents who have switched to an ARES with rate comparison information on their monthly electric bills is an easy way to allow them to see the price difference and it should prompt them to cancel expensive contracts with these predatory companies.”

Madigan said consumers find it extremely difficult to determine how much the traditional utility’s price compares to the prices ARES charge, particularly when faced with aggressive and fraudulent sales tactics at their door or over the phone. Compounding the problem, ARES engage in bait and switch marketing tactics to entice consumers with low teaser rates that can end up increasing to as high as three times the traditional utility rate.

There are 103 ARES licensed to sell electricity in Illinois. In the past four years, consumers who enrolled with ARES service have paid over $600 million more for electricity than they would have paid with ComEd or Ameren service. In one year alone, from June 2017 to May 2018, Illinois consumers paid a total of about $227 million more with ARES service. Even though over 100,000 consumers dropped their ARES service last year, the total amount of overcharges continues to rise.

Last spring, in an effort to protect consumers against ARES’ misleading savings claims and gross overcharges, Madigan and other advocates urged lawmakers to pass meaningful consumer protection reforms, including requiring price comparison information on every customer’s utility bill and in all ARES marketing materials and solicitations. Madigan said public utilities should adopt Madigan’s recommendation to inform customers about the total cost of their electric supply choices.

Madigan has taken legal action against four alternative retail energy suppliers and is investigating others for aggressive and deceptive sales tactics that have defrauded Illinois consumers out of millions of dollars, including a lawsuit earlier this year against Major Energy LLC. She previously settled with Ethical Electric Inc. and PALMco Power IL LLC and is in ongoing litigation with Sperian Energy Corp.

Madigan offered the following advice for Illinois residents who are solicited by an ARES:

NEVER answer the door to a stranger, especially if they are trying to get you to switch your utility service.

NEVER show or share your utility bill or account number with someone who comes to your door or calls you on the phone.

Do not sign anything!

Be wary of any offer that promises or guarantees savings.

No alternative supplier is affiliated with or endorsed by your utility or the government. If you sign up for service with an alternative supplier, you are entering a new contract with a different company.

[Office of Illinois Attorney General Lisa Madigan]