Updated: Regulator Confirms In Final Order That Retail Supplier Not Required To Charge Less Than Default Service

Supplier Not Required To Charge "Market Rates"

Agrees That Rules Under "Essential Utility Services" Code Do Not Apply To Retail Suppliers

January 7, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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The Illinois Commerce Commission issued a final order dismissing a formal customer complaint against Spark Energy Gas, LLC, as the ICC ruled that it is not a violation of Articles IX or VIII of the Public Utilities Act to charge more than the default service provider for gas supply, and ruled that Spark is not required to charge, "market rates."

Full background on the proceeding and customer allegations are detailed in our original December 4 story below

The ICC dismissed the complaint, and the order is notable for its findings.

In doing so, the ICC said, "Respondent is correct that Section 19-120(b) governs the Commission’s jurisdiction over AGSs such as Spark. Specifically, the Commission will investigate any complaint alleging that the AGS has violated any Section of Article XIX of the Act, that the AGS did not provide services in accordance with its contract, that the AGS has violated or is in non-conformance with the transportation services tariff of the gas utility or municipal system, or that the AGS has failed to comply with the requirements of Article VIII of the Act."

The ICC noted that, "Here, [complainant] does not allege any specific violation of the Act or the Commission’s rules of practice. [Complainant] claims that his rates were higher than he would have paid had he remained a customer of Nicor Gas. However, it is not a violation of Articles IX or VIII to charge more than the default service provider for gas supply. Moreover, [complainant] admits he understood from the Spark sales agent that his gas charges would fluctuate. Additionally, his contract for service with Spark identified his rate when he enrolled, and that it was a variable rate."

The ICC further said that, "The Commission agrees with Spark that it is not required to charge 'market rates' and [complainant] admits he signed up for a 'variable rate.' [complainant] alleges no violation of either Article XIX or Spark’s contract."

The ICC also affirmed that Part 280 of the administrative code, relating to "essential utility services", does not apply to retail suppliers

"Moreover, Spark correctly asserts that Part 280 does not govern AGSs because it only applies to public utilities," the ICC said

"[Complainant]’s contract (Exhibit 2) explains a fixed versus variable rate price. On October 15, 2012, [complainant] was reminded that his fixed rate service was ending, and he would be switched to a variable rate at the end of the year (Exhibit 1CORR.). The Commission finds that there was no violation of the contract or its terms," the ICC said in dismissing the complaint

Spark Energy provided the following statement concerning the matter: "We’re pleased to have this matter behind us and we remain committed to providing electricity and natural gas choice to consumers in Illinois."

Docket 20-0039

Earlier, From December 4, 2020:

Proposed Order Would Find That Charges In Excess Of Default Service Are Not A Violation By A Retail Supplier

        Would Dismiss Complaint Seeking To Apply Rules Under "Essential Utility Services" Code To Retail Suppliers

A proposed order from an ALJ at the Illinois Commerce Commission, addressing a formal customer complaint filed against Spark Energy Gas, LLC, would find that, "it is not a violation of Articles IX or VIII to charge more than the default service provider for gas supply."

The complainant alleged that they signed up with Spark in 2011 for a fixed rate 59.9 cents/therm.

The complainant alleged that a renewal notice sent by Spark in 2012 said that the contract would rollover to a, "competitive variable rate", with the complainant alleging that this rate would be based on market prices.

However, the renewal notice did not use the term, "market prices." The renewal notice stated: "Upon expiration, your account will automatically roll into a competitive variable rate plan. You can ensure we will take care of it all, so simply sit back and relax and enjoy your continued service without interruption."

The complainant alleged that, in the following years, the complainant experienced higher gas bills. Eventually, in 2019, the complainant examined their supply rate, which was allegedly $1.40/therm. At this time, the complainant researched other offers from retail gas suppliers, and found them to be between 28 cents and 38 cents per therm. The complainant alleged that, in various months, the complainant had been "overcharged" versus the Nicor default service rate in amounts ranging from 50-300%

Among other things, the complainant alleged that, "Spark Energy violated the administrative code by applying policies in a discriminatory manner, charging its customers a lower rate, while billing [complainant] at a substantially higher rate." The complainant alleged that, "Spark Energy violated the administrative code when its representatives did not demonstrate good faith and fair dealing, promising a competitive variable rate to its customer." The complainant also sought an "investigation" of Spark's billing methods.

Notably, the complainant, among other things, sought relief under the Illinois Administrative Code, Title 83, Chapter I, Section 280.5.

The section of the code is meant to, "ensure that essential utility services are provided to and maintained for the People of the State of Illinois under reasonable terms and conditions, and to establish fair and equitable procedures governing eligibility for service, deposits, billing, payments, refunds and disconnection for gas, electric, water and sanitary sewer utilities that take into account the duty of the utility, customer, applicant and occupant to demonstrate good faith and fair dealing."

In a proposed order, the ALJ would dismiss the complaint, and deny all of the relief sought by the complainant

The ALJ found that, "Respondent is correct that Section 19-120(b) governs the Commission’s jurisdiction over AGSs such as Spark. Specifically, the Commission will investigate any complaint alleging that the AGS has violated any Section of Article XIX of the Act, that the AGS did not provide services in accordance with its contract, that the AGS has violated or is in non-conformance with the transportation services tariff of the gas utility or municipal system, or that the AGS has failed to comply with the requirements of Article VIII of the Act."

"Here, [complainant] does not allege any specific violation of the Act or the Commission’s rules of practice," the ALJ said

"[Complainant] claims that his rates were higher than he would have paid had he remained a customer of Nicor Gas. However, it is not a violation of Articles IX or VIII to charge more than the default service provider for gas supply," the ALJ said

"Moreover, [complainant] admits he understood from the Spark sales agent that his gas charges would fluctuate. Additionally, his contract for service with Spark identified his rate when he enrolled, and that it was a variable rate [sic]," the ALJ said

"On October 15, 2012, [complainant] was reminded that his fixed rate service was ending, and he would be switched to a variable rate at the end of the year. The Commission finds that there was no violation of the contract or its terms," the ALJ said

"The Commission agrees with Spark that it is not required to charge 'market rates' and [complainant] admits he signed up for a 'variable rate.' [Complainant] alleges no violation of either Article XIX or Spark’s contract," the ALJ said

Notably, with respect to the complainant's allegations that Spark violated the part of the administrative code (Part 280) relating to "essential utility services", the ALJ would find that, "Part 280 does not govern AGSs because it only applies to public utilities."

Spark Energy provided the following statement concerning the matter: "Spark Energy looks forward to the order being finalized so this matter can be behind us. We appreciate the opportunity to provide electricity and natural gas choice to residents and businesses in the state of Illinois."

Docket 20-0039

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