Illinois’ attorney general is calling for an end to the retail power-supply business in Illinois as she unveils a $2.65 million settlement with Sperian Energy for deceptive marketing and overcharging.
Illinois Attorney General Lisa Madigan is calling for an end to the retail residential electricity-supply market in Illinois.
In a press release today disclosing a $2.65 million settlement with Houston-based Sperian Energy, one of dozens of power suppliers in the state, Madigan said, “This settlement is another step in reforming the (retail electricity) industry that the legislature should ban in the residential market.”
Madigan has been highly critical of an industry that uses questionable marketing tactics to convince households to contract for power at prices that almost always are more than they would pay if they stuck with utilities like Commonwealth Edison. But this appears to be the first time she’s explicitly called for the elimination of residential power sales altogether.
The settlement also for the first time bans a supplier from marketing in Illinois for an extended period of time. Sperian has agreed not to solicit customers here for another two years. Sperian hasn’t marketed in Illinois since an Illinois Commerce Commission investigation three years ago found the firm to be using deceptive tactics. Today’s settlement also closes that ICC probe.
The $2.65 million will go to providing restitution to more than 60,000 Sperian customers who paid too much for electricity, Madigan’s office said. The firm has about 9,000 current Illinois customers.
The company also will be barred from charging new or existing customers monthly service fees for five years. Existing Sperian customers will be allowed to cancel their contracts without paying exit fees.
In a statement, Sperian said it “takes legal and regulatory compliance very seriously. We have not admitted any wrongdoing in this matter, and are settling the matter to avoid the uncertainty, distraction, and expense of protracted litigation. The settlement resolves all open issues with the Illinois Attorney General and Illinois Commerce Commission, puts the litigation behind us and allows us to focus on the most important aspect of our business—our customers.”
Sperian is owned by a San Francisco-based private-equity firm, SNH Capital Partners.
Sperian is the third supplier to enter into a settlement with Madigan’s office. A lawsuit against New York-based Major Energy still is pending.
Efforts to reform the residential power-supply industry have sputtered thus far in Springfield despite state reports showing that customers in the aggregate have paid hundreds of millions more than they would have with ComEd over the past two years.
Kevin Wright, president of the Illinois Competitive Energy Association, said in an email, “The attorney general’s legislative efforts to kill residential retail electric competition was rejected by the House this spring. In the Sperian case, the attorney general has proven that vigorous enforcement of current law and rules against unscrupulous suppliers works. The Illinois Competitive Energy Association supports strong enforcement action by the Illinois Commerce Commission and the attorney general to root out from the retail market suppliers who engage in misleading or abusive marketing practices.”
Madigan will leave office next year, and it’s unclear whether Democrat Kwame Raoul or Republican Erika Harold will be as aggressive as Madigan in taking on the industry.