Another State Regulator Warns Customers About Variable Rate Contracts

The Illinois Commerce Commission yesterday, "urged Illinois' electric customers, who have contracted with retail electric suppliers, to be aware that the recent cold temperatures and resulting spike in wholesale power prices, may affect their rates if their contract includes a variable rate."

"Current retail customers, particularly those on variable rates, are advised to review their existing contracts and contact their suppliers to answer questions and address any concerns," the ICC said.

"While the vast majority of the more than three million Illinois residents who take competitive electricity service from alternative retail electric suppliers are on fixed rate contracts, some customers, on variable rates, could see large increases in their electric supply rate," the ICC said.

"Customers who entered contracts that allow rates to vary with market conditions could be subject to frequent rate changes, depending on the contract terms. Although fixed-rate customers are guaranteed a set rate for a period of time, some of those contracts may be converted to a variable rate agreement after the fixed-rate period ends. In addition, some variable rate contracts offer a short-term introductory fixed rate that converts to a variable rate," the ICC said.