Consumers are being warned about solicitors pitching electricity-rate deals. Door-to-door and phone offers promising to save money on power-supply costs can be misleading and wind up costing customers more. That’s the warning from the Citizens Utility Board.
The Illinois utility watchdog group (CUB), is seeking reforms to help customers make better deals in an electricity supply market that opened up competition in Illinois eight years ago.
The group emphasized it's targeting bad deals that are peddled door-to-door and through email and telemarketing, rather than municipal aggregation deals negotiated by communities on behalf of their residents and businesses that generally come with consumer protections.
In some cases, misleading offers wind up costing customers double to triple the supply rates offered by their local regulated utilities, according to the CUB.
Customers of alternative electric suppliers lost a record $198 million from June 2016 through May 2017, even more than the $125.8 million they lost the previous year, the group said.
The CUB is calling on state lawmakers to launch three reforms, one of which would ban automatic renewal of power supply contracts that are sometimes subject to renewals at significantly higher rates.
Other reforms needed, the group said, are regulations forbidding suppliers from hiding their charges on utility bills and requiring that price comparison information to the regulated utility's rate be displayed on all bills.
A change in state law in 2010 began allowing municipalities to bargain for power supply rates on behalf of customers in their communities, with regulated utilities such as Ameren Illinois continuing to handle the power delivery.
Residential and business customers are permitted to opt out of these deals, though, and purchase electricity from other suppliers if they choose.
Some tips from the CUB to avoid making bad power deals on your own:
— If you live in a community that has an aggregated power supply deal, such as Champaign and Urbana, beware of door-to-door marketers claiming they're affiliated with the community's power supplier. Municipal aggregation programs such as Champaign's don't do this kind of marketing, and they won't send people to your home about that.
— Sales people claiming to be from "the electric company" offering deals at your home could be trying to obtain your account number to sign you up for an alternate supplier without your permission.
— Before you sign up for an alternate deal, some good questions to ask are how the company's rate compares with your local utility's price, whether this is a fixed or variable rate, whether it's an introductory rate subject to increases, whether there is a monthly fee and whether there is an exit fee for those leaving a plan before a contract is up.
The CUB said it has seen fees as high as $9 a month among alternate power suppliers. The group also said it receives many complaints from consumers who said the lower price they signed up for with an alternate supplier skyrocketed a few months later.
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