CUB: Read the fine print with alternative energy suppliers
February 18, 2013 (CHICAGO) (WLS) -- Electric rates are coming down due to competition, but a citizen's watchdog group says consumers need to beware of misleading marketing.
A lot of people are paying noticeably less for their power, in some cases $100 to $150 a year less. The spirited arrival of alternative energy suppliers is finally doing what open market advocates said it would: drive down prices.
"In fact, we estimate that competition generated somewhere between $100 million and $200 million in total savings for consumer last year," David Kolata, Citizens Utility Board [CUB], said.
Most of the savings has come through municipal aggregation, which is when communities switch as a whole to an alternative supplier. Chicago, for instance, has switched to Integrys.
The monthly the bill still comes from ComEd. ComEd distributes the power, and gets paid for that. However, what Chicago residents pay for the power, itself, goes to Integrys.
The competition for your power dollar has led to some misleading phone and door-to-door marketing, according to CUB.
"There'll be cases where someone will come to your door and say we're from the city or we're from the electric company and you need to sign here to get the deal the city negotiated-- and that's not, in fact, the case," Kolata said.
Case in point: Megan Lueck, a new homeowner in a northwestern suburb buys her power from ComEd. She gets a knock on the door.
"She said I'm with CommonwealthEdison and we need to confirm your account since you're a new homeowner. And so we're na´ve and, I said, 'Yeah OK,'" Lueck said. "They switched us over, and I get a letter in the mail from IGS and I said, 'What is this?'"
Turned out it was another electricity supplier. Megan switched back to ComEd. The message from CUB is that - beware, be smart. Confusing as this all is, it pays to understand the fine print.
"We have to make sure that as this market develops it doesn't turn into the wild, wild west - that people are following the rules and marketing things in the right way," Kolata said.
The savings that people are realizing now may not continue because in June, ComEd's old rate package ends, and it'll be able to offer lower prices. So the honeymoon of saving's time, as CUB calls it, may not have lasting power.
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