CUB, City of Chicago Seek ICC Investigation of Retail Market, Each Supplier's Individual Compliance

The Illinois Citizens Utility Board and City of Chicago have petitioned the Illinois Commerce Commission to investigate the Illinois retail electric market, and the compliance of each certified ARES in Illinois with the Public Utilities Act and the Commission’s Administrative Rules

In a CUB investigation of increasing complaints, "CUB reviewed contracts of customers with variable rate provisions and believes that the description of the price terms in these contracts is not sufficient to meet the disclosure requirements in the Act."

CUB noted two examples of suppliers' variable disclosure language as:

"Under a variable price agreement, your rate for the first month of service will be set forth at time of enrollment and confirmed in your Welcome Letter. After the first month you will pay a variable rate for electricity supply service, which can fluctuate on a month-to-month basis, as described in the Price section below.

"Electric Variable Price shall each month reflect the cost of electricity obtained from all sources (including energy, capacity, settlement, ancillaries), related transmission and distribution charges and other market-related factors, plus all applicable taxes, fees, charges or other assessments and [ARES’] costs, expenses and margins."

"[T]hese price descriptions do not adequately disclose the prices, terms and conditions of the products or services offered by the respective ARES, in violation of 220 ILCS 5/16-115A(ii), and do not indicate how the variable charges are determined in violation of 83 Ill. Admin. Code Part 412.110(d)," CUB said.

CUB further said that complaints, particularly those about excessive increases in variable rates, show that, "customers did not realize they were exposing themselves to the type of significant price variability they experienced this winter."

"Furthermore, several complaints allege that not only did the customer not understand what rate she was being charged, the customer was also not aware she was on a variable rate, or was not even aware she was in a contract with an ARES, which suggests other marketing abuses are at issue," CUB said.

"[T]hese complaints suggest that certain ARES may be engaging in unauthorized switching, prohibited by 220 ILCS 5/16-115A(b), and/or misleading marketing prohibited by the Consumer Fraud Act, 815 ILCS 505/2," CUB said.

"When seeking to cancel service or communicate a complaint to an ARES, several of the complaints indicate that the customer was unable to contact the ARES," CUB said.

"The complaints identified above suggest a disturbing trend of potential marketing abuses the economic impact of which is significant when the customer is on a variable rate plan with no rate cap. These complaints raise serious questions about the compliance of ARES’ variable rate contracts and marketing material with the PUA and Commission Rules, as well as the Consumer Fraud Act," CUB said.