In Response to “After six-year dispute, court orders $37 million ComEd refund”
Written by Michael Vrtis President of Realgy Energy Services in response to the Crain’s article After six-year dispute, court orders $37 million ComEd refund
So how do all the various entities work in overseeing a regulated utility or why does it take 6 years to refund overcharges?
This Crain’s article provides a great example, let’s look at the 3 steps:
STEP 1
The utility; ComEd has a monopoly to delivery electricity in its area and is overseen (regulated) by the Illinois Commerce Commission (ICC). ComEd wants to be paid more for providing service and goes to the ICC requesting an increase in fees from customers in exchange for providing better and more useful service.
The regulator; ICC approves a rate increase (and the improved service) for which ComEd begins charging customer
STEP 2
The Consumer Advocate; Citizens Utility Board (CUB) is an agency that seeks to ensure ComEd treats its customers (mainly residential) fairly. Remember ComEd is a monopoly and can only charge what the ICC (in some cases politicians) approve. The CUB sees that the ICC approval of the rate increase unfairly treated the consumer to the benefit of ComEd. So, CUB sues ComEd and wins.
The Court; orders the ICC to review the matter. Again, the court won’t get into the technical review (that’s why they sent it to the ICC for re-review).
STEP 3
This step is about appealing (delaying) the previous decisions….. in this case the ICC agrees with CUB and removes those funds from the rate base which means ComEd (having already collected them) has to return them. They don’t have to return them as they were received but by some form of distribution of the funds.
Of course, ComEd appeals to the appellate court (they review lower court decisions) and lost. The appellate court would have to overturn the ICC on technical issues to agree with ComEd.
So let’s see if the money is returned. This example illustrates that a regulated utility has many people who watch them and those who watch and act to hold all sides accountable really do serve the public interest.
How does this affect Realgy’s customers; they will receive a refund (depending on how ComEd disperses them) as this was a charge related to distribution of the wholesale supplied energy in part provided by Realgy.
Check out the Crain’s article: “After six-year dispute, court orders $37 million ComEd refund”
What is budget billing?
Many utility companies offer a budget billing plan to their customers. This basically means that you will end up paying a set amount each month for your utility bill. Your utility company will generally take an average of your past energy usage and estimate future gas or electric costs to come up with your monthly set amount. While this may seem like a great idea, you should carefully consider several things before enrolling.
First you should find out if a refund or credit will be issued if less energy is used. Some utility companies may not issue a refund if less power is used than planned. Additionally you may need to set aside extra money to cover the cost after the settle-up if more energy was used than the utility planned for.
Second you should also look at administration fees associated with the service. Many will charge a monthly fee. The fees will vary from utility to utility, but anything more than two or three dollars a month is too much for this service.
Third you should consider the contract that you sign when enrolling for the budget plan offered by your utility. There may be penalties applied if you move or turn off the service. For example you may end up paying extra when you move if you have used more power than was budgeted.
Fourth if you are enrolled with a Registered Energy Supplier such as Realgy Energy Services, it is important to find out if all charges will be covered under the budgeted amount. Some utilities will not allow for budgeting if the customer is enrolled with a supplier.
It is important that you fully understand what you are signing up for, check out your local utilities website before signing up for a budget plan or request to see a copy of the contract.
However, the easiest way to reduce your monthly utility bill would be to enroll with a Registered Energy Supplier to lower your energy rates, check out Realgy Energy Services rates for June 2012 and see how much you could be saving www.realgyenergyservices.com.