Residential power customers overpaying through alt-suppliers: Report

Local governments across Illinois may have residents who are overpaying for power.

According to an annual report by the Illinois Commerce Commission, municipalities that locked in agreements with alternative electrical suppliers other than Ameren and ComEd rarely saved their residents any money in the 12 months ending in May 2016. Illinois residents overpaid more than $125 million in that one-year period.

The report found that customers who used alternative carriers overpaid an average of $57 more per year, compared with rates offered by ComEd. Municipalities that signed up for non-ComEd providers paid more than $115 million in total bills, the majority of the loss in savings statewide.

Ameren Illinois customers using alternative providers saved money during summer months, but those savings were offset when Ameren dropped their prices in the fall and winter, and residents on the other plans still paid a higher price. This led residents to largely breaking even, depending on what part of the state they lived in, as the utility company splits its service area into three zones.

“People need to be careful when they’re shopping,” Citizens Utility Board spokesman Jim Chilsen said.

Chilsen said it’s the responsibility of local officials to update consumers on whether they’re overpaying.

“We have seen plenty of examples of communities saying, ‘We’ve saved money up to this point, but the market has changed, and now we’re offering a rate that is a bit higher than ComEd.’”

In Rockford, the switch to Constellation Energy saw an average savings of $300 a year for customers in 2012. But by 2014, prices had increased more than $200, and last year the city began recommending customers return to ComEd.

Chilsen said most municipalities that entered into these deals have no fees for homeowners looking to get out of the plan.

Chilsen said the reason these deals are no longer typically competitive is that Ameren and ComEd’s supply contracts, which were based on higher energy rates, expired in 2013. This allowed them to begin charging less for their services.

Statewide, 742 communities allow for aggregate power purchasing.

–Illinois News Network & Staff reports

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