A retail power industry in need of reform comes to the table
Is the retail electric supply industry ready for reform?
Recently completed state rules compelling power retailers to be more transparent with their sales pitches left consumer advocates underwhelmed. They plan to press the Legislature next year for far tougher provisions, aimed at ensuring that consumers know what they’re buying when they sign with competitors to Commonwealth Edison or Ameren Illinois and that they don’t get unwittingly caught paying double or more what they should to keep the lights on.
In the year that ended in May, northern Illinois households that bought electricity from unregulated suppliers paid $152 million more in the aggregate than they would have if they’d just stuck with ComEd, according to the Illinois Commerce Commission.
“The gaps in the rules reflect the continued need to increase and strengthen disclosures for consumers to make informed decisions about their electric service,” a spokeswoman for Illinois Attorney General Lisa Madigan says in an email. “There’s more work to be done.”
After fiercely contesting similar efforts in past legislative sessions, the industry is taking a more conciliatory tack. Kevin Wright, president of the Illinois Competitive Energy Association, says he hopes to hash out legislation with Madigan’s office and the Citizens Utility Board next year.
“We’re very much willing to engage in those conversations as long as it’s not a back-door attempt to re-regulate the residential market,” Wright says.
The ICC on Oct. 19 finalized rules three years in the making that establish a uniform set of disclosures suppliers must provide consumers when signing them up. They also require firms to record inbound sales calls, which helps in resolving later disputes between consumers and suppliers.
But the industry beat back attempts to require the posting of utility prices in company offers so that consumers know whether they’re saving or not. It also convinced a panel of state lawmakers to insist on removing provisions that would have forced suppliers to notify customers via phone when their fixed-rate contracts expire and they move automatically to variable rates.
Frequently when that happens consumers see their prices shoot up. Often it takes months or even years for those not paying close attention to their bills to notice they’re paying too much.
Jenny Bowman, a single mother in Rockford, was one of those unfortunate people. She lives paycheck to paycheck and pays her electric bill every other month to make ends meet. After getting a series of disconnection notices, she called ComEd and learned to her surprise that she was a customer of a company she’d never heard of called Green Mountain Energy.
Bowman says she never signed a contract with Green Mountain, a unit of Princeton, N.J.-based NRG Energy. When the firm presented her with the document, she said that wasn’t her signature. In the meantime, she’d been charged roughly twice what she would have paid with ComEd for at least two years—paying by her account nearly $1,700 too much.
When she complained, the company offered her a “one-time courtesy credit” of about $420. She took the rare step last month of filing a formal complaint with the ICC.
“If it was me who stole the information and used it, I would be in trouble. I’d be in jail or something,” she says in an interview. “I’m just tired of people taking advantage of people.”
In an email, a Green Mountain spokeswoman says the company “is proud to offer Illinois residents the choice of powering their homes and businesses with 100 percent renewable energy, an option the local utility doesn’t provide. We value our customers and take all complaints seriously. When we discover something irregular might have occurred, we work diligently to make it right with the customer. As an active legal matter, we can’t provide further information at this time.”
