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Tougher regulations on door-to-door energy sales pass House

Tougher regulations on door-to-door energy sales pass House

Bill requires greater transparency from alternative energy suppliers

By JERRY NOWICKI

Capitol News Illinois

Jnowicki@capitolnewsillinois.com

SPRINGFIELD – The Illinois House passed a bill backed by the state’s attorney general Thursday that would enact greater regulation of alternative retail energy suppliers, many of which go door-to-door using “deceptive practices” to lock consumers into contracts that ultimately lead to higher energy costs.

In a unanimous vote, the House passed Senate Bill 651, the Home Energy Affordability Transparency, or HEAT Act, sending it back to the Senate. That chamber passed the bill 43-10 on May 1, but must agree with a minor amendment to send it to Gov. J.B. Pritzker’s desk.

The bill was an initiative of Attorney General Kwame Raoul, who said at a news event last month  “almost nobody” who signs up to receive gas or electricity from alternative energy providers ends up paying less for their energy bills than consumers who stayed with their public utility.

“Energy suppliers rely on sales gimmicks and misleading sales pitches in order to lure consumers into high-priced energy contracts, and the HEAT Act will force suppliers to change the way they do business,” Raoul said in a release Thursday after the bill’s passage.

The bill was sponsored in the House by Rep. Jehan Gordon-Booth, a Peoria Democrat, who said it will protect against “misleading and deceptive, fraudulent claims” by door-to-door energy salespeople.

Gordon-Booth said Illinois customers who switched to an alternative supplier paid more than $600 million more in electricity costs over the past four years.

“The purpose of this bill is to ensure that consumers fully understand what they are signing up for,” she said.

By enumerating acceptable and unacceptable practices for the industry, Raoul said the bill would improve his office’s existing authority to bring suit against suppliers.

At the April press event, Raoul said he and his predecessor, Lisa Madigan, have filed suit against nine of the 100-plus licensed energy suppliers in the state.

Often, he said, the consumers targeted in alternative suppliers’ marketing campaigns are receiving state assistance from the Low Income Home Energy Assistance Program and Percentage of Income Payment Plan.

If the bill becomes law, alternative suppliers would be required to provide consumers with information about rates, fees and early termination charges, and they would be required to obtain consumers’ express consent before the contract is switched from a fixed rate to a variable rate.

Suppliers would also be required to notify customers before their rates rise, and would be prevented from automatically renewing a consumer’s contract without their knowledge. They would also be required to report their rates to the Illinois Commerce Commission and the attorney general’s office. 

“Alternative retail suppliers have gotten rich at the expense of consumers who are struggling,” Gordon-Booth said in a release. “I would like to thank Attorney General Raoul for protecting vulnerable communities and communities of color across Illinois from being used to pad retail suppliers’ pockets.”

The bill also requires suppliers to end solicitations if the consumer does not understand English.

In a statement Thursday evening, energy provider Direct Energy said in a statement it was "pleased" the bill would "greatly reduce the number of teaser products in the market through stronger consumer protections.

"While this is a good start, Illinois consumers are still required to spend up to 47 days more than customers in other states to switch providers and plans. We will continue advocating for progressive reforms to give Illinois consumers greater control over their competitive choices."

 

 

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