I-Team: Alternative utility suppliers under scrutiny

The City of Chicago and a utility watchdog group are accusing some electric suppliers of misleading and overcharging customers.
Wednesday, June 11, 2014
The City of Chicago and a utility watchdog group are accusing some electric suppliers of misleading and overcharging customers. They're calling for a state investigation.

As temperatures climb, so do electric bills. Across the board, rates are going up. Alternative suppliers charge variable rates, and some of those utility companies are now facing scrutiny.

James Robinson and watchdog group Citizens Utility Board (CUB) are questioning his most recent electric bills -- the prices and his variable rate supplier.

"And I know that these figures doesn't match and I don't like it," Robinson said.

CUB and the Chicago Department of Business Affairs and Consumer Protection (BACP) both said Robinson's case is one example of how variable rate, alternative electric plans may be taking advantage of consumers.

"Over the last few months we have seen an increase of complaints on alternative suppliers and the worst of these have involved variable rates," David Kolata, CUB executive director, said.

"Confusing offers, misleading pitches, prices up to six times higher- these are examples of how consumers were misled and defrauded," Maria Guerra Lapacek, commissioner for BACP, said.

BACP and CUB filed a petition for an investigation into at least a half dozen suppliers that offer variable rates. They want the Illinois Commerce Commission to issue fines or even revoke some business certificates of companies potentially violating the law. The city is already conducting its own investigations and has issued subpoenas.

"In many cases the contract and marketing materials we examined didn't provide this key detail they said you would be on a variable rate but they didn't provide any information on the marketing or methodology index or formula," Kolata said.

CUB said there are some variable rate plans that can be alright if consumers know how they change with the market. However, some of the plans under scrutiny are charging more than the market rate.

In Robinson's case, CUB said some of the charges from alternative supplier Starion Energy were about 13 cents per kilowatt hour.

"It makes you feel bad for one thing. From my economic standpoint, it's hurting. I am retired," Robinson said.

Robinson's February bill was almost $200 and his March bill was $124. He said he doesn't use electricity to heat his West Side home and some bills from prior months were as low as $50.

Robinson also said he doesn't remember ever signing up for Starion.

The ABC7 I-Team called Starion Energy, which is based in Connecticut, as well as the Illinois Competitive Energy Association, which supports alternative suppliers. The group said this is not a widespread problem, but supports a potential state investigation to weed out what it calls "bad apples."

Consumers who want a variable rate plan should make sure to read the policy and check the company out with consumer groups.

In some cases, it may be best to go with a fixed rate plan.


Related I-Team Consumer Investigations:


Home heating bills skyrocket during extreme winter


I-Team: Watchdog group questions one gas company


Gold Coast woman gets $2,000 electric bill
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