Electric Retailer Marketing Violations

The Illinois Commerce Commission has approved a settlement addressing allegations of marketing abuses by Sperian Energy, an Alternative Retail Electric Supplier (ARES). Under the settlement, Sperian will refund a total of $2.65 million to Illinois consumers and suspend all marketing efforts in Illinois for two years. The allegations stemmed from customer complaints made to the Commission’s Consumer Services Division about both door-to-door sales and telephone solicitations. In addition to paying refunds and suspending marketing efforts, Sperian will not include an Energy Service Fee in any new or renewal agreement entered into a renewed, or in any customer billing for current customers, for a five-year window. The retailer also agreed to follow certain practices and procedures including: (1) not representing in any manner that a customer will save money on electric bill, unless the company discloses in plain language during the sales presentation the conditions or circumstances that must occur in order for the savings to be realized; (2) if the Company uses the word “rebate” in any of its marketing material, disclosing the amount of the rebate and all qualifying conditions that must present for the rebate to occur; and (3) all mailings which refer to a variable rate must include a telephone number, email address, and/or website information through which a customer can contact the Company in order to obtain an explanation of how and why rates change. Illinois Commerce Commission v. Sperian Energy Corp., 15-0438, Oct. 25, 2018 (Ill.C.C.).

Illinois Energy Rates

The Illinois Commerce Commission has authorized Ameren Illinois Company (AIC) to increase rates for delivery of electric service by $71.6 million and by $31.7 million for the delivery of gas. Both rate rulings reflect reduced federal corporate income rates under the Tax Cuts and Jobs Act 2017. Under an agreement between the utility and the commission staff, the electric net revenue approved by the commission incorporates an overall rate of return of 6.985% based in part on a return on common equity of 8.694%. The electric ROE figure equals the 2.894% monthly average 30-year U.S. Treasury bond yield plus an adder of 580 basis points as required under a formula rate ratemaking option selected by the utility for setting its electric distribution rates. AIC and Staff also agreed, for the purposes of the gas proceeding and without agreeing on the underlying ROE methodologies and inputs used by each, that a 9.87% ROE is supported by the record evidence and is reasonable for setting AIC’s gas delivery rates. Re Ameren Illinois Co. d/b/a Ameren Illinois, 18-0807 & 18-0463, Nov. 1, 2018 (Ill.C.C.).
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