The watchdog for Illinois utility customers warned of rip-offs Tuesday in the state’s “buyer-beware electric market” after fielding several complaints about alternative-energy suppliers.
The Citizens Utility Board released a new report complaining of “exorbitant rates,” low introductory rates, extra fees, “punishing” exit fees and high-pressure sales pitches experienced by alternative-energy customers.
But representatives for two energy companies mentioned in the report blamed price increases on a winter that created an “unprecedented demand for electricity for all suppliers.”
“This is happening across the board in every state,” Major Energy spokesman Mark Berger said.
The CUB report highlights complaints from customers whose utility rates suddenly spiked after promises of savings and months of lower rates. It said an unidentified Maywood senior citizen was paying North American Power about 16 cents per kilowatt hour after someone went door-to-door and promised she would save money. That’s roughly triple the current Commonwealth Edison rate.
“It wasn’t us,” said North American Power spokeswoman Tiffany Eddy. “We don’t go door-to-door in Illinois.”
In Major Energy’s case, an unidentified Melrose Park woman’s rate allegedly jumped from an average of 7 cents per kilowatt hour to as high as 35 cents.
Berger couldn’t speak specifically about that case. But he and Eddy said their companies have actively encouraged customers to sign up for fixed-rate plans that would eliminate such volatility. Eddy said North American did so in anticipation of the rough winter.
“We did reach out to our customers,” Eddy said.
Berger said the terms of variable rate plans are explained on Major Energy’s website. Customers who choose those plans may at times enjoy significant savings, he said, but variable rates may also rise.
“Supply runs low, price goes up,” Berger said.
The highest rate reported to CUB was 35 cents per kilowatt hour, according to its report. The five highest advertised rates on May 7 ranged from about 15 cents per kilowatt hour by Viridian to about 10 cents per kilowatt hour by Xoom Energy, it said. Neither company’s representatives could be reached for comment. Ambit Energy ranked just above Xoom at about 11 cents per kilowatt hour. But Brenda Kerrick, vice president of poduct management at Ambit Energy, pointed out in an email that “the report only looks at May 2014 rates, which does not represent the year-long savings that Ambit Energy customers receive.”
The CUB report was released less than a week after ComEd customers learned the cost for their electricity will rise to 7.5 cents per kilowatt-hour, up from 5.5 cents, starting June 1.
Jim Chilsen, a CUB spokesman, encouraged customers to be alert and ask good questions when considering an alternative energy supplier. He pointed to pricing plans available to customers with digital electric meters and made a pitch for energy efficiency.
“The cheapest kilowatt hour is the one that you never use,” Chilsen said.