CUB Alleges Illinois Alternative Retail Natural Gas Suppliers Are Violating HEAT Act

October 26, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Illinois Citizens Utility Board alleged in a blog post concerning alternative natural gas suppliers that, "many suppliers are violating a new consumer protection law that went into effect this year."

CUB's allegation is based on an observation contained in a recent natural gas market annual report from the Illinois Commerce Commission's Office of Retail Market Development (ORMD).

The ORMD gas report stated, "Although a number of offerings posted on the ICC website include a termination fee, it is important to note that termination fees are no longer permitted in Illinois. Specifically, the Home Energy Affordability and Transparency (HEAT) Act, effective January 1, 2020, states as follows, 'residential and small commercial customers shall have a right to terminate their agreements with alternative gas suppliers at any time without any termination fees or penalties'. The responsibility of updating offerings on the ICC website and removing outdated information, such as early termination fees, falls on the AGS [alternative gas supplier]; however, a number of AGS have failed to update the terms and conditions of these offers."

Based on this, CUB alleged in its blog post that, "The ICC assessment also reported that several suppliers are violating the Home Energy Affordability and Transparency (HEAT) Act, one of the nation’s toughest consumer protection laws to fight rip-offs."

Among other things, the HEAT Act requires that AGS annually submit to the Commission and the Attorney General, the rates the AGS charged to residential customers in the prior year by January 1. This required filing shall include the distinct rate charged, whether the rate was a fixed or variable rate, the basis for the variable rate, and any additional fees charged. Beginning in 2021, ORMD is required to include information pertaining to the rates charged in the ORMD annual report. ORMD said in the report that it is currently reviewing the 2019 AGS rate reports and determining how to include the required information in future reports.

Unlike the electric annual report, the gas annual report does not compare aggregate costs paid by shopping natural gas customers versus shadow-billed default service costs.

In 2019, 45 small volume transportation gas suppliers in the Nicor Gas, Peoples Gas, and North Shore Gas territories were active. These suppliers served more than 316,000 residential customers and more than 56,000 small commercial customers.

From 2018 to 2019, Nicor Gas saw a small decrease in the number of residential customers switched to AGS service, while North Shore Gas and Peoples Gas areas had an increase in quantity of residential customers. A chart of this data is below:

ORMD reported that in the residential market, the top three natural gas suppliers served about 40% of switched customers in each utility service area, with the percent generally decreasing slightly over the past few years. A chart of this data is below:

Link to ORMD report

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