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Unregulated energy suppliers have led to financial losses for customers, according to consumer advocacy groups. Now, they are backing new legislation that calls for “sweeping reform” on unregulated providers.
Many consumers have complained about automatic renewals and unexpected charges.
On Tuesday, Robert Smith, who got a $406 gas bill in January, spoke to the Citizens Utility Board (CUB) about how his gas bill from an unregulated supplier skyrocketed. He said he didn’t realize his fixed rate would change to a variable rate, which goes up and down with the market place.
“Over the 9-month period, it gradually increased from 140 percent to 150 percent to 180 percent to eventually until month nine, I was paying three times what I would have paid at Nicor,” Smith said.
Consumers are facing “unprecedented financial losses” from unregulated gas and electric deals by alternative suppliers, according to CUB and the American Association of Retired Persons (AARP). They specifically cite an Illinois Commerce Commission (ICC) report that states customers lost $197.8 million on alterative electric deals between June 2016 and May 2017.
“Every day we get calls from consumers who are confused by offers from alternative electric and natural gas suppliers or complaints about misleading marketing, horrible deals and rip-offs,” said Dave Kolata, of the Citizens Utility Board.
CUB and AARP are support proposed state legislation, which they say would increase transparency on unregulated deals.
“These alternative suppliers market door to door, over the phone, by mail and every other means of communications that we can come up with. The problem is, consumers end up paying far more for these alternatives than they should,” said Ruby Haughton-Pitts, of AARP.
The legislation would ban automatic renewals on contracts without specific consumer consent. It would also require alternative suppliers to send a separate bill with their logo – instead of billing through the regulated provider, which always delivers the energy.
The legislation is sponsored by state Rep. Marcus Evans, D-Chicago.
“The individuals who are targeted for these particular changes, changes to your bills or to go to these alternative companies? It’s a lot of seniors who may not understand what’s going on and hear fast talking sales folks, or low income folks, it’s just the reality. Those two folks are targeted and I represent those folks,” Evans said.
The Illinois Competitive Energy Association said upcoming state mandates should be enough: “The Illinois Commerce Commission’s (ICC) new consumer protection rules that regulate retail electric supplier marketing and sales practices effective May 1 should be allowed to improve the residential market before imposing these consumer group proposals.”
One of those upcoming ICC rules would require companies to provide a “uniform disclosure statement” to better explain plans.
The group representing alternative suppliers also calls the legislation “unworkable,” adding that the consumer groups should instead refer complaints about bad suppliers to the ICC, saying that complaints can be thoroughly investigated and punished by that state agency.
