Clearing Civic League Members Hear CUB Update on Electricity Deal, Gas Concerns

Claiming that “the biggest fear of a utility company is an educated consumer,” a Citizens Utility Board (CUB) official offered updates this week on Chicago's municipal aggregation effort and other concerns.

Chilsen speaks to CCL members

CUB Communications Director Jim Chilsen delivered remarks to about two dozen members of the Clearing Civic League at Hale Park.

According to city officials, "Municipal aggregation uses the group purchasing power of residents to help cities negotiate lower prices on electricity bills, and potentially cleaner energy sources. Over 200 Illinois communities have already used aggregation to capture savings for residents and small businesses. On November 6, 2012 Chicago voters approved a referendum authorizing the City to seek lower electricity rates for residential and small business ratepayers. After receiving prices and service qualifications from retail electric suppliers, the City has negotiated an agreement with Integrys Energy Services, Inc., that will lower monthly electricity bills for residents and small businesses."

CUB infographic

The parent company of Integrys Energy Services is Integrys Energy Group---which is also the parent company of Peoples Gas, Chilsen pointed out, prompting groans from several people in the audience.

Chilsen offered CUB's take on Chicago's aggregation deal and sounded a note of caution when he said that while aggregation will save customers a significant amount in the short term, “The jury is still out on long-term savings.”

The reason for this is that ComEd is currently locked into higher priced contracts; and other suppliers can undercut ComEd’s prices, Chilsen said. Those contracts are up in June of 2013. After that ComEd can change its supply rate to a lower and more competitive price.

Deceptive Practices

Chilsen warned about consumer scams related to other electricity supply companies when and if this happens.

Integrys will not send anyone to a Chicago resident’s door to get them to sign up. Sign up was automatic unless a customer opted out of the program. A postcard was sent to Chicago consumers via their latest ComEd bill that they had to sign and mail in. If someone comes to the door saying they are from Integrys, they are not, Chilsen said.

“Alternate suppliers may get desperate,” Chilsen said, “and when that happens ‘slamming’ could occur.”

Chilsen speaks to CCL members after the meeting

Slamming is when a supplier, not of the consumer’s choice, asks for the ComEd account number, or a current electric bill, when a representative from that company comes to the door. The alternate supplier then switches the consumer to their company, unbeknownst to the consumer. Problems can occur if customers try to get back to ComEd or Integrys and the alternate supplier charges an exit fee, or after a preliminary period, charges a much higher rate than first stated.

If a stranger shows up at your door and asks to see your utility bill, never share that information---and never share your account number, no matter how official looking the person may appear, Chilsen added.

Regardless of who your electricity supplier is, ComEd will still deliver the electricity to your home and bill you. "They own all the wires, all the infrastructure, and that's where they are supposed to make their profit," Chilsen said. "Our disagreements with them have often centered around what is a reasonable profit versus what is an exorbitant profit."

Asks Clearing Residents to Stop Gas Legislation

Chilsen sounded the alarm on a piece of proposed state legislation that he said represents an attempt by Peoples Gas and others to subvert the authority if the Illinois Commerce Commission by opening the door for yearly, automatic rate hikes for consumers. Currently, Peoples Gas must make their case for rate hikes before and get the approval of the ICC.

In the Illinois House of Representatives, the proposed legislation is House Bill 2414; in the Illinois Senate, it is Senate Bill 1665. Peoples Gas says that the legislation is needed to help them modernize gas mains and other infrastructure.

When asked by the Southwest Chicago Post what Illinois House Speaker Michael J. Madigan's position is on the proposed law, Chilsen said he was not certain. An online check indicates that SB 1665 is co-sponsored by State Senator Martin A. Sandoval (D-11th), a Madigan lieutenant who shares office space with the Speaker at 6014 South Central.

Chilsen urged all at the meeting to contact their state senators and state representatives and urge them to vote against HB 2414 and SB 1665.

CUB Offering Utility Bill 'Checkups'

Chilsen encouraged everyone to attend one of two upcoming events at which CUB representatives will quickly analyze gas, electricity and phone bills for free and show consumers how to save money quickly and easily. For details, click here.

Finally, he urged everyone to join CUB. Membership costs as little as $10 a year. Details here.

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