In an Oct. 2 filing with the ICC, Illinois Attorney General Kwame Raoul’s office, along with consumer advocate Citizens Utility Board, called on the commission to continue the suspension of in-person marketing. “This is not the time to threaten health through direct transmission or to allow potentially predatory in-person marketing for energy products almost certain to cost consumers more than the regulated utility,” the filing said.
The commission is expected to act on the staff’s motion within the coming weeks.
The staff in its motion said it “became aware” on Sept. 16 that the state’s Department of Commerce & Economic Opportunity “had begun to interpret its own guidelines to allow in-person solicitations provided that solicitors wear masks and proper social distancing is maintained, although DCEO had not published such guidance. Staff immediately contacted DCEO and confirmed this.”
The governor backs that up. “As the state has moved to phase four, the public health guidelines have largely focused on creating a new normal as we continue to live with this virus,” Pritzker spokeswoman Jordan Abudayyeh says in an email. “As the public health guidance requires, face-to-face interaction should only be conducted with face coverings and appropriate distance.”
The industry’s market share erosion during the COVID restrictions shows how critical door-knockers are to its success, as well as its struggles to retain customers.
For example, Houston-based Spark Energy, traditionally one of the heaviest employers in the market of door-knockers and the source of more customer complaints than any other supplier, saw its customer count in the four-state Midwest region, including Illinois, drop 23 percent to 76,000 from 99,000 from Dec. 31 to June 30, according to Securities & Exchange Commission filings. CEO Keith Maxwell attributed some of that loss to the suspension of in-person marketing.
“But we have taken this time to reassess our sales strategies, so that we can hit the ground running once they are able to ramp back up,” he said on Spark’s Aug. 5 earnings call.
Constellation, the retail energy supply unit of ComEd parent Exelon, previously employed marketers going door to door. The largest supplier both nationally and in the region, Constellation says now, “In December 2019, independent of the ICC moratorium, we made the decision to cease residential door-to-door sales and have no plans to resume those activities.”
A state law to reform the marketing and contract practices of suppliers went into effect at the beginning of the year. That so-called HEAT act cracked down on the previous practices of luring customers with low-cost rates for a brief period and then dramatically increasing those costs once the teaser expired.
Even so, customers of outside suppliers in ComEd’s territory paid a record 26 percent premium on average for electricity, an amount that collectively totaled $145 million in the year that ended May 31, according to the ICC. The commission doesn’t tabulate how much households taking gas from nonutility players collectively overpay. But the vast majority pay well above the utility’s gas charge, which fluctuates each month.
In its annual report assessing the retail gas market, released Oct. 1, the ICC noted that many of the natural gas offers posted on its website violate the HEAT act. The offers continue to include termination fees for consumers who cancel their contracts before expiration, something the law prohibits.
Said the report: “The responsibility of updating offerings on the ICC website and removing outdated information, such as early termination fees, falls on the (supplier); however, a number of (suppliers) have failed to update the terms and conditions of these offers.”