Deregulation in the energy industry opened the doors to competition back in 1997, but the market is only recently beginning to light up.
There are now a half-dozen energy companies on the Chicago landscape offering electric service to residential customers, some offering discounts up to 30 percent lower than ComEd's prices, and their pitches are strong.
But while switching can take just minutes, it doesn't come without warning.
"This is something people are not used to shopping for," said Citizen Utility Board Executive Director David Kolata. "We've had situations that what you think you are signing up for you are not signing up for, so you want to make sure you are an educated consumer."
Right now, the rates vary nearly 30 percent, from ComEds high of 8.3 cents per kilowatt hour to Champion’s low 6.4 cents. Bluestar of Chicago, Constellation, Direct Energy, Energy Plus, Ambit Energy, Nordic Energy and Spark Energy fall in between.
Contracts go from monthly to yearly, but if you’re dissatisfied and want out, early termination fees could be as high as $150. Each deal is different, and customers should make sure they get any offer in writing.
"This could be an opportunity to save money," said Kolata, but there are no guarantees.
Another caveat: two big factors could soon change the competitive landscape.
ComEd is expected to reduce its electric rates this June, but at the same time is expected to hike up its delivery rates if it gets approval from the Illinois Commerce Commission next month.
The average delivery rate increase would be seven percent. That's important because even if you switch to another power provider, you cannot escape that part of ComEd’s rates. No matter what company supplies the energy, Comed will be delivering it to your home.
"So if a company says, 'This is a way to avoid ComEd rate increases,' that is not true," advised Kolata.
In a statement, ComEd said it has been a "champion and advocate for competition," and supports the right of the consumer to choose their energy supplier.
The CUB has put together a fact sheet on all the companies in the marketplace comparing rates and terms of the contracts. Another website, Power2Switch, is offering one-stop shopping for resources and easy switching to at least some of the companies. PluginIllinois also has offers and comparison tips.
But will the switch save you money?
"I think the jury is still out if residential competition is going to have lasting value for consumers," said Kolata.
The concern is that while consumers have the opportunity to save money with competitive pricing now, many will let the switch burn a hole in their pocket later.
Deregulation in the natural gas market also brought a bevy of competitors, but in the end 93 percent actually ended up spending an average of $700 more per year.
"We hope the electric market is different," said Kolata.
So far, residential switch rates have been low.
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