CHICAGO — Beware of alternative retail energy suppliers offering deals that sound just too good to be true, local and state authorities are cautioning.
In a warning Wednesday, Illinois Attorney General Kwame Raoul said these private, for-profit companies selling electricity and natural gas have been out marketing in and around stores where holiday shoppers are rushing around trying to finish buying their gifts.
“As people rush to purchase last-minute holiday gifts, they should also be wary of energy suppliers that set up in busy retail spaces to entice customers with false claims of free energy and deceptive reward benefits,” he said.
Raoul also urged retailers to protect their customers by keeping alternative retail energy supply marketers from selling inside or outside their stores.
Scott Tess, Urbana’s environmental sustainability manager, said the city has also been warning local residents on its website about retail energy suppliers going door to door with high-pressure and misleading offers.
“The sales behavior has been pretty bad,” he said.
There’s a difference between alternative energy suppliers bearing misleading offers and the alternative energy suppliers municipalities contract with on behalf of their residents, Tess said.
In these cases, the cities are doing the research on behalf of their residents on the pricing and terms.
“We are in a large bidding group with a bunch of other municipalities in Illinois and we bring our bulk volume to drive down prices and get good terms,” Tess said.
For instance, “our municipal agreement has no cancellation fees,” he said. “That’s aside from driving down the price. We also use agreements that have flat pricing throughout the term so there are no surprise prices.”
Since Urbana began offering a municipal electric aggregation program, its residents who have taken advantage of that have saved a net total $1.3 million, according to the city.
Raoul said alternative retail energy suppliers who are out making sales pitches typically claim to offer cheaper electricity and gas compared with private utility rates.
Yet, in the past five years, Illinois consumers who signed up with these suppliers paid $870 million more for electricity than if they’d remained with their public utilities, he said.
Some tips from Raoul and the city of Urbana for those being solicited by alternative retail energy suppliers:
— Never show your power bill to the sales person.
— Request all offers to be in writing and never enroll on the spot.
— Ask about any fees, charges and contract term lengths, and be aware there may be hidden fees.
— Be cautious about any offer of a lower price than your current electric supplier. It could be an introductory rate that will increase later.
— Ask which company the sales person is working for, and know the name and rates of the energy supplier delivering your power now.
Urbana residents who don’t opt out of the city’s municipal electric aggregation program are being supplied by Homefield Energy. In Champaign, the contract supplier is Constellation New Energy.