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Consumers, City of Chicago Fight Back Against Variable Utility Rates and Energy Scams

Consumers, City of Chicago Fight Back Against Variable Utility Rates and Energy Scams

Over the past century, electricity has rapidly progressed our technology and our economy. But for some Chicago residents, it’s causing serious frustration when they receive their energy bills.

The City of Chicago and the Citizens Utility Board, a Chicago watchdog activist group, are currently defending several customer complaints against Spark Energy and petitioning the state’s electricity regulator to launch an investigation. Spark Energy’s consumer complaints stem from the company’s variable electricity rates and misleading marketing tactics.

In addition to Spark Energy, the City of Chicago said that it has issued subpoenas against six companies that the city suspects of price gouging. Maria Guerra Lapacek, commissioner of business affairs and consumer protection for Chicago, would not name the companies under investigation.

The companies under investigation are smaller companies on the market, according to CUB director David Kolata, and they gain customers by tricking people to sign up during door-to-door marketing campaigns. These representatives often misrepresent themselves as employees of other energy companies, and they switch willing customers to other services without their permission.

These companies then charge a variable rate that can be as high as 35 cents per kilowatt hour with no explanation to customers on how these charges are determined. That’s about four times the average utility rate and six times the rate of Commonwealth Edison, the largest electric utility in Illinois serving the Chicago and Northern Illinois areas.

Kolata says that many of these companies using variable rates are violating the law by not informing customers of how those rates are derived. Sometimes the charges don’t even have anything to do with energy costs.

One such customer who experienced variables as much as 50 percent higher between months was Helen Ramirez-Odell. She called Spark Energy for an explanation but was only told about the variable rate then.

James Robinson, 71, said that he was asked by two “college kids” who showed up to his door and signed him up for a plan with Starion Energy, which is currently rated an “F” by the Better Business Bureau based on its 200+ consumer complaints over three years. However, Robinson was not informed at the time that he would be signing on with Starion, and later his bill jumped from an average of $50 per month to $200 without warning.

The Illinois Commerce Commission, which regulates state energy providers, will determine in the next few days whether to conduct an investigation of these energy companies. Companies that don’t comply with state regulations and the Public Utilities Act could be fined up to $30,000 and may also have their state certifications revoked.

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