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CUB shares: Buyer beware — five biggest pitfalls in Illinois’ power market
From The CUB Voice, June 2014, Special Electric Issue
Reprinted by permission
Illinois’ electricity market has gone through major changes over the last year, and CUB has seen a 115 percent jump in complaints about unregulated electricity suppliers.
“It’s a buyer-beware power market,” CUB Executive Director David Kolata said. “We want to warn all Illinois consumers about how to spot bad power deals, but also spread the word about some promising offers that will soon be available.”
Kolata said new digital electric meters being installed by Ameren and ComEd open the door to power plans that are better tailored for consumers in a market that has become much more volatile in recent months.
More than 3 million Illinois consumers have chosen an alternative supplier — and from 2011 to 2013 many enjoyed significant savings because the regulated utilities were locked into higher-priced contracts.
However, the last of those utility contracts expired last year, and ComEd and Ameren rates became much more competitive with alternative suppliers. Then, the cold Illinois winter helped push up market prices.
Bottom line: There are a lot more bad deals out there now. Beware of these pitfalls:
1. Exorbitant rates: Check how the price compares to the utility’s rate, below.
Price to Compare*,
June through September:
ComEd: 7.596 cents/kilowatt-hour
Ameren: Zone 1: 4.657 cents/kWh
Zone 2: 4.553 cents/kWh
Zone 3: 4.633 cents/kWh
*Price doesn’t include Purchased Electricity Adjustment (PEA), a credit or debit that changes monthly.
2. Low introductory rates that disappear: Introductory rates can shoot up after a short period. Ask if the rate is an intro rate, how long it lasts, and what the new rate will be.
3. Extra fees: Always ask if there is a monthly fee, and factor that into the per kilowatt-hour (kWh) price.
4. Punishing exit fees: Many suppliers charge exit fees of up to $175 if a customer leaves a plan before the contract is up. Under the law, customers are allowed to leave a contract without paying an exit fee within 10 days after the date of the first bill.
5. High-pressure sales tactics: Beware of people at your door who say they’re from the “electric company.” Don’t give out your account number or power bill to just anybody who asks for it. That person may be trying to sign you up for an offer without your permission. If you have questions about an offer, please call CUB, at 1-800-669-5556.
From the June 25-July 1, 2014, issue