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My So-Called Competitive Electricity Supplier

by: Josh Lutton
Posted on: July 5, 2018
I’m embarrassed by this story.  Earlier this week, I found out I was getting a raw deal from the company that supplies the electricity for my home (a “competitive electricity supplier”).  I should have been the last person this would happen to.  After all, I run an energy company (Certasun) and previously spent a decade consulting to utilities and large renewable energy companies.

Illinois, like several other states, has deregulated parts of its electricity market.  Although consumers generally have to purchase electricity delivery from their local electric utility (for most people in northern Illinois, ComEd), they can purchase electricity supply (i.e., generation) from any one of dozens of firms.  In short, you can buy supply from ComEd, but you don’t have to.  These non-ComEd suppliers are sometimes called “competitive electricity suppliers” or “alternative retail energy suppliers”.

You might be purchasing supply from one of these alternative suppliers because they offered a lower rate than ComEd at some point, because they offered renewable energy, or because your community participated in “municipal aggregation” and switched everyone who didn’t explicitly opt out.

How I Ended up with a “Competitive Electricity Supplier”

A few years ago, I decided I wanted my electricity supply to be 100% renewable, so I starting buying from a competitive electricity supplier.  (I also installed a solar system, but it doesn’t supply all the electricity I use.)   At the time, the renewable electricity was about 15% more expensive than ComEd’s, but I was willing to pay a little more so that I could imagine wind turbines instead of smokestacks when I turned on the lights.

Fast forward to a few weeks ago.  I was reviewing the electricity bill of a potential customer and noticed his electricity supply from another competitive supplier was really expensive: 17.4 cents per kilowatt-hour.  For comparison, he could buy the same electricity from ComEd for 7.4 cents per kilowatt-hour.  He was paying 135% more than he needed to.  Even though I noticed that 17.4 cents was expensive and told the customer about it, frankly I just assumed there must be some reason he had chosen that supplier and didn’t think more about it.

Until three days later.  That’s when I noticed my own electricity bill was a little higher than I remembered, so I clicked through and looked at the details.  I was gobsmacked to see that my supplierwhich I had previously felt pretty good about—was charging me 14.9 cents per kilowatt-hour for electricity supply.   Again, that’s more than double the price offered by ComEd and way more than I had agreed to pay.

When I called to inquire about what was going on, I was told that the lower rate I had been getting expired three months earlier and I was now on a much higher “month-to-month” rate.  I can’t guarantee my supplier didn’t try to notify me before the price increase, but I sure don’t remember getting anything in the mail.  I can confirm that none of the email accounts I’ve used in the past five years contained any warning about the rate increase.

How can you stop this from happening to you?

1.  Review your ComEd bill and look for surprises

Do you recognize the company that is supplying your energy?  Does the rate they are charging match what you thought you were supposed to be paying?  It is possible that like me, you signed up years ago for a rate that has since expired.  If that’s the case, chances are good that you are paying more than you should be.

The graphic here shows the portion of your ComEd bill that gives the name of your electricity supplier and the rate they are charging.

2.  Compare rates

Now that you know who is supplying your energy and how much you are paying, consider shopping around.  If you were on a one-, two-, or three-year plan that has since expired, you may well be able to get a better rate now.

Know also that ComEd is regulated by the state and watched over closely by groups like the Citizens Utility Board.  They may not have the very best rates at any given moment in time, but at least you know the rates you are getting have been carefully vetted and you will never find yourself grossly overpaying.

3. Consider going solar

Finally, if you don’t have a rooftop solar system, consider one.  First, starting in 2018, state law requires ComEd and other large utilities to pay incentives to those who install residential solar.  As a result, solar is now often the cheapest way to power a home.  Second, if you buy or lease a solar system, you will never see another unexpected rate increase.  Finally, with a home solar system, you won’t have to regularly check to see if your energy supplier has changed your rates.  Instead, you will have locked in your lower rates for 20 years or more.

by: Josh Lutton
Josh is the President of Certasun.



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