Taking another look at Community Choice Aggregation

May 28, 2014
Power-Lines-214

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

When communities signed up for Community Choice Aggregation (CCA) plans a few years ago, the Citizens’ Utility Board (CUB) advised that the cost savings were only assured during the contract period. They also suggested that ComEd had entered into some costly long-term contracts that would end soon, so the amount saved through CCA would change over time.

That time has arrived: cost savings have narrowed, and seeking an alternative energy supplier requires careful scrutiny before signing on. CUB considers the current market “much more treacherous for shoppers than it was just a year ago.”

For years, there was no question as to what company provided customers with their electrical power. ComEd was the regulated supplier in northern Illinois. The situation changed radically during the past couple of years. Alternative suppliers entered the power market. Customers flocked to companies that promised lower prices for them. More than 3 million customers now purchase their electricity through alternative suppliers, compared to 1.8 million a year-and-a-half ago. During 2011 through 2013, these suppliers offered significant savings, since ComEd was locked into high-priced contracts. Last June, as the contracts expired, ComEd’s price plummeted. Then, the cold winter inflated alternative suppliers’ prices.

CUB has received numerous customer complaints about unexpectedly higher prices from alternative providers, according to CUB Spokesman Jim Chilsen. “Right now, it’s a buyer-beware electric market in Illinois,” he said.

Several specific companies are cited by CUB as being guilty of excessive price changes. However, their report also “stressed that many suppliers are acting appropriately.” Since they are unregulated, they have the freedom to increase prices without notice.

Consumers have been hit with electric bills that they consider exorbitant. Complaints increased 115 percent. CUB released a report citing several of those complaints. An Oak Park, Ill., man who was told his approximately 5 cent/kWh charge would not change, saw the rate jump to 21 cents/kWh. A Chicago man saw his bills hold steady at 5.2 cents for six months, then reach as high as 16 cents/kWh. A Melrose Park, Ill., woman’s bill skyrocketed from 7 cents/kWh to 35 cents/kWh. Each of these individuals dealt with a different supplier.

However, an Oregon, Ill., woman who negotiated independently has seen her rate hold steady at 5.88 cents/kWh.

Prices for electricity provided by both ComEd and alternative suppliers are expected to rise this June. ComEd’s will rise from 5.5 cents/kWh to 7.596 cents/kWh, but it is unknown how other suppliers will react.

CUB recommends that consumers who are considering a switch check carefully before signing an agreement with an alternative supplier. Customers should request details about pricing. Find out if initial low prices are scheduled to increase after a short time; are they only introductory? Are there additional fees? Some companies charge extra monthly fees in addition to per kWh prices and may levy a penalty of up to $175 for leaving before a contract expires.

ComEd has a program that charges a time-of-use rate, encouraging customers to use heavy appliances when demand is low, between 7 p.m. and 7 a.m. Currently, one alternative supplier also uses a time-of-use program.

CUB is the watchdog group for utility customers, created by the Illinois Legislature. For more information, visit their web site, www.citizensutilityboard.org.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the May 28-June 3, 2014, issue

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