When Ella Allen and Diashawn Wright got an unusually high gas bill for their home in West Pullman toward the end of 2022, the parents of five young children thought it was a fluke.
But when the monthly charges skyrocketed during winter — reaching a whopping $1,030.77 for their bill due last March — they took a closer look. That’s when they noticed an entry on the last page of the bill that said “alternative energy supplier service.”
The supplier, Direct Energy, was billing their usage at 97 cents per therm — nearly twice the price Peoples Gas would have charged.
It turned out they’d been billed by the alternative gas supplier for months.
The couple say they never signed up for Direct Energy and don’t know how the switch occurred. Allen called it “a complete nightmare.”
When Illinois deregulated natural gas and electricity markets more than two decades ago, it allowed hundreds of companies to compete as suppliers of residential utility services. Complaints started surfacing, and despite consumer protections that took effect in 2020, some customers are still reporting issues.
Some like Allen and Wright say they never knew an alternative supplier was on their bill until the charges started piling up.
Others knowingly accepted a deal for electricity or natural gas offered by a door-to-door salesperson or at a pop-up booth — deals often including a free gadget or gift card — but say it ended up costing them more after the introductory rate ended.
“Unfortunately, this is a very common story,” says Sarah Moskowitz, executive director of the Citizens Utility Board, a nonprofit that advocates for utility customers in Illinois.
Before deregulation, gas and electric utilities in Illinois controlled both the supply of energy and the infrastructure bringing it into people’s homes.
Opening up the supplier market was meant to bring prices down — and it did.
But these days consumer advocates say it’s usually a better deal to stick with your utility company for electricity and gas.
“We’re not really seeing folks save even in the face of fluctuating gas prices,” Moskowitz says.
Illinois sues over ‘deceptive’ practices
Illinois Attorney General Kwame Raoul has taken action against several alternative suppliers for deceptive marketing, most recently New York-based Residents Energy LLC, which the agency says had customers paying double or more for their electricity.
The lawsuit, filed in Cook County circuit court in September, says salespeople for Residents Energy misled consumers into thinking they were dealing with their public utility and touted low rates without disclosing that those were temporary, introductory prices.
In some cases, customers were “slammed” or enrolled without their consent, the suit says.
It says “consumers who switched to Residents [Energy] virtually always paid considerably more for their electricity than they would have had they not switched.”
A spokesman for Residents Energy says the accusations are “uncorroborated and inaccurate” and that the company will “continue to offer Illinois customers environmentally responsible and other value offers that represent an alternative to their local utility’s take-it-or-leave-it rates.”
The attorney general’s office advises caution with any alternative energy offer, saying they “typically offer low introductory prices that appear to be lower than the utility price but increase substantially after a few months.”
92-year-old dad surprised by contract
Grace Balinski is still angry about what happened to her 92-year-old father Guadalupe Muñoz, who she says was signed up for a Direct Energy natural gas contract without his consent, resulting in years of higher prices.
After she discovered this, the company showed her a contract dated Sept. 15, 2014, a day Balinski can prove that her father, then 83, was in California visiting his sister. The signature and phone number on the contract aren’t her father’s, Balinski says.
Muñoz, who lives in McKinley Park, never noticed Direct Energy was the supplier on his bill. His payments were set to auto pay, and he thought letters from Direct Energy were junk mail and didn’t open them, his daughter says.
Seven years passed before Balinski, wondering why her dad’s bills were so high, discovered the switch and stopped it in early 2022.
She still doesn’t know how he got signed up. She suspects a door-to-door salesperson might have gotten his information from a hired caregiver who was at the house with her bed-bound mother.
“My dad worked hard all his life, and he doesn’t deserve this,” she says.
After they filed complaints, Direct Energy offered Muñoz a check for $423.47 without admitting any wrongdoing.
A spokesman for NRG Energy, parent company of Direct Energy, says it has “tens of thousands of customers” in Illinois, and noted that NRG acquired Direct Energy in 2021, several years after the Muñoz contract was created.
“NRG and Direct Energy strive to ensure all customer interactions are great ones,” the spokesman says. “We have a robust sales training and compliance program that is updated regularly. When we do receive a complaint, it is investigated thoroughly, and we make every effort to resolve it amicably. On the rare occasion when a sales representative fails to meet our standards, we address it immediately.”
The Better Business Bureau of Houston, where Direct Energy is based, has given the company a “D” rating and posted an alert about the business, after getting complaints and reviews from around the country about “rude and unhelpful customer service representatives” and “delayed resolutions to contract and billing discrepancy issues.”
On the BBB website, Direct Energy says it’s working hard to reduce complaints and has a “zero-tolerance policy for aggressive door-to-door selling behavior.”
‘Clean’ energy sales pitches
Some alternative suppliers pitch “clean” electricity, appealing to consumers’ desire to help the environment.
But experts urge people to read the fine print. Some contain rates roughly double what ComEd charges, and the promised “green energy” could be the company purchasing renewable energy certificates for power generated years ago in another state.
A better way to help the environment locally, says Moskowitz, is Illinois’ community solar program, in which customers buy shares in a solar farm and receive a credit toward their electric bill.
“We have very good, progressive energy policies here in Illinois,” Moskowitz says.
Allen and Wright are still trying to make sense of what happened with their gas bill.
First, in early 2022, they say their gas meter was stolen, and a leaking gas pipe on their property had to be fixed, costing about $3,000.
Then, that fall, they were signed up with Direct Energy — the couple doesn’t know how — and their bills soared for months, until they saw the line on their gas bill mentioning an “alternative energy supplier.”
Allen says she complained to Direct Energy, which released them and offered an $1,800 refund, which she says she declined because it wouldn’t cover the ballooning bill and it would bar her from taking further action. She has since complained to the attorney general’s office.
Meanwhile, the family applied for a Low Income Home Energy Assistance Program grant and was awarded $2,000. But in a terrible twist, the LIHEAP grant was sent to their old account number, from before the pipe work, and was rejected by Peoples Gas.
Allen recently reapplied for the LIHEAP grant, but this time she received only $285 because funding for the program has been reduced.
“It’s ridiculous,” she says. “It has robbed us of our peace.”
Watch your utility bills
Illinois’ Home Energy Affordability and Transparency Act, which took effect in 2020, bans early termination fees — previously a top complaint from consumers who’d get hit with hundreds of dollars in fees if they tried to exit a supplier contract.
The HEAT Act also requires suppliers to obtain a signature for contracts that renew from a fixed rate to a variable rate and to provide pricing disclosures for auto renew plans.
Consumer advocates offer this advice:
- Monitor your bills carefully. “It’s important for consumers to open and read their entire electric and gas bills each month,” Illinois Commerce Commission spokeswoman Cayli Baker says.
- If you’ve been unwittingly signed up for a plan or wrongly charged, file complaints with the Illinois Commerce Commission, icc.illinois.gov/complaints/public-utility, and attorney general, illinoisattorneygeneral.gov/File-A-Complaint/; both can help individuals as well as track patterns of company behavior.
- If you’re considering an offer from an alternative supplier, read the fine print. Check whether it’s a promo rate that could eventually go up. For electricity offers, the ICC has comparison info online at plugin.illinois.gov/. Never agree to anything on your front porch, says Steve Bernas, president of the Better Business Bureau of Chicago. “Everybody’s always in a hurry, including the salespeople who want you to sign on the dotted line.”
- Learn how to decode your bills at citizensutilityboard.org/. To ask for an analyst’s help, call the board’s hotline at (800) 669-5556 or use their online form at citizensutilityboard.org/complaintform
“I just hope people will at least glance at their bill at least once a month,” Moskowitz says. “Ignorance is not bliss in this case.”
