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CUB Issues Consumer Alert for Chicago Area Natural Gas Users, Don't Be Fooled By Misleading U.S. Energy Sales Tactics

Posted on: Monday, 24 April 2006, 15:00 CDT

CHICAGO, April 24 /PRNewswire/ -- The Citizens Utility Board (CUB) Monday issued a consumer alert, warning utility customers to beware of a natural gas supplier that is going door-to-door using misleading sales tactics to convince consumers to lock in gas prices for the next five years.

CUB has received hundreds of inquiries and complaints about the company, U.S. Energy Savings Corp., and will be filing a complaint against it with the Illinois Commerce Commission (ICC) on Monday. The complaint asks the commission to ban the company's misleading sales tactics and levy fines for each instance of consumer fraud.

U.S. Energy sales people have been going door-to-door, soliciting business by posing as representatives from or claiming its service is endorsed by Nicor Gas, Peoples Gas, the ICC and even CUB. The company also appears to be targeting areas of Chicago and the suburbs where English is not the native language of many residents.

"This company is engaged in the worst kind of consumer fraud, preying on people's fears of rising natural gas bills and resorting to deception in order to boost sales," CUB Executive Director David Kolata said. "Today we are telling consumers if U.S. Energy -- or any other company for that matter -- comes to your home peddling natural gas service, shut the door on them."

For example, several customers who called CUB said the company came to their door with a "petition" to freeze natural gas rates. A few weeks later, they received welcome letters stating their natural gas service had been switched to U. S. Energy.

The Chicago Department of Consumer Services also has received complaints about the company.

"Many people are trying to lower their gas bills, but before signing a contract, consumers should compare prices from multiple suppliers," said Commissioner Norma Reyes, of the city's Department of Consumers Services. "Only by comparing prices and thoroughly understanding the terms can consumers make an educated decision."

U.S. Energy is one of eight alternative gas suppliers participating in the "customer choice" programs offered to Nicor Gas, Peoples Gas and North Shore Gas. Alternative suppliers generally offer either a fixed rate, locked in for a period of one to five years, or a variable rate tied to an index that changes monthly.

As of April 19, the company was offering to lock in natural gas prices for four to five years at a price of $1.19 per therm, plus a balancing charge of 2.31 cents per therm, for a total price of $1.21 per therm. Marketing materials from the company warn that natural gas prices are rising and lead customers to believe they can save money by locking in prices.

But according to CUB's Gas Market Monitor, the majority of consumers who switch to alternative suppliers end up paying more. The Market Monitor is a free service provided by CUB that compares the rates charged by alternative suppliers with the actual prices of Nicor, Peoples Gas and North Shore Gas, as reported to the ICC. The rate comparison is updated monthly.

"Gas prices over the past few years have placed a heavy financial burden on Chicago residents. The City has and will continue to educate people on the importance of making homes more energy efficient through various heating fairs and supplying weatherization materials at those fairs," said Sadhu Johnston, Commissioner of the Chicago Department of Environment.

CUB is urging consumers to follow a few simple rules when considering alternative gas suppliers:

-- Never sign up for any new service at your door. -- Never give out your utility account number to anyone unless you are certain they are from the gas company. -- Never sign up for service without thoroughly reviewing the contract in writing. -- If you're not interested in switching suppliers and concerned about falling victim to a scam, ask your gas company to put a block on your account, which will prohibit any unauthorized changes to your service. -- If you're confused by a natural gas plan, call CUB's Consumer Hotline at 1-800-669-5556 or check out the Gas Market monitor at http://www.citizensutilityboard.org/ .

CUB is a nonprofit statewide utility watchdog organization created by the state legislature to represent the interests of residential and small-business utility customers.

Citizens Utility Board

CONTACT: Pat Clark of Citizens Utility Board, +1-312-263-4282

Web site: http://www.citizensutilityboard.org/

Source: PRNewswire

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