All summer, Bloomington-Normal residents have reported large increases in their energy bills. With some electricity bills doubling, even tripling, during the warm season, residents are looking to save money wherever possible. One method many Illinoisans have looked towards are alternative energy suppliers (ARES). These are third-party suppliers operating independently from traditional utilities, such as Ameren and Com-Ed, and are known for their door-to-door and mail solicitations. These suppliers promise savings on energy bills, making them an attractive offer. However, studies and analyses by the state’s Citizen Utility Board (CUB) paint a different picture, estimating that Illinois residents who use alternative suppliers have lost over $2 billion this past decade. But why are alternative energy suppliers such a bad deal? Are they legal at all, and why does Illinois even have them in the first place? Let’s take a better look into alternative energy suppliers, as well as more proven methods to save money on energy bills.
Illinois’ Unique Market
Unlike many states, Illinois’ utility market is deregulated. In a regulated market, one utility provider has a monopoly on electricity generation, transmission, and supply. From the power plant to your meter, the utility controls the whole process. Their rates are pre-determined, and regulated, by state public utility commissions. While this limits consumer choices, regulated markets tend to have stable electricity rates and long-term certainty in those rates.
In a deregulated market, electricity supply and generation are opened up as competitive markets, allowing other companies to purchase electricity and sell it to retail suppliers. These suppliers then compete to sell the electricity to customers, setting electricity rates in the process. Utilities are still responsible for transmission and maintenance. Deregulated markets allow for more consumer choice with rates and service, potentially allowing extra savings as well. On the downside, deregulated markets can lead to predatory sales practices and potential market manipulation.
Illinois consumers have a choice in who supplies their electricity. Municipalities can also partner with a supplier and set an electricity rate through municipal aggregation.
Bloomington-Normal’s Market
Bloomington-Normal residents have 3 choices for electricity supply:
- Ameren-the investor-owned utility for the region
- Constellation-the municipal aggregation program for B-N
- A third party supplier
Constellation has a stable rate negotiated by the local governments, which will be renegotiated in spring 2026. Ameren rates fluctuate more often and change with the seasons, but they can fluctuate to be cheaper than an aggregation rate, or more expensive. Ameren can possibly offer more savings, while Constellation offers predictability and stability.
What about third party suppliers?
Third party suppliers (ARES) are legal in Illinois. They can solicit customers through phone calls, door-to-door sales, and direct mailings. Customers will typically sign a contract that automatically renews. ARES can be more economical during times when utility rates are locked into expensive contracts. However, according to the CUB, this has not been the case for the past 10 years. Even with the recent rate hikes, Ameren and Constellation will have the cheapest rates. Unfortunately, many suppliers use deceptive marketing to make their rates seem like the best deal. This is done by promoting an introductory rate, which usually is cheaper than the utility/aggregation rate. However, these rates can increase later in the contract, or after the contract renews. There can also be hidden fees that customers won’t know about until they see their bill. Customers can also find themselves signed up for an alternative supplier without their consent, especially if a seller has a customer’s utility account number, which is usually obtained during a sales pitch.
Investigations by the Chicago Sun-Times and the Citizen’s Utility Board (CUB) found that many customers wound up paying much more for their bills after willingly or unwillingly switching to alternative suppliers, with some bills doubling in rate. CUB estimates that Illinois residents have lost nearly $2 billion to ARES, and the Illinois Attorney General has filed lawsuits against many ARES for deceptive marketing practices.
How can residents help themselves?
Never sign a contract without reading the terms, and never give your utility account number to an ARES unless you are certain you want to sign a contract. Always look for when an introductory rate expires, how expensive the standard rate is, and how to get out of renewing the contract. To avoid any door-to-door sales, a No Soliciting sign on your home makes it illegal for salespeople to solicit business at your home.
How can residents save money on bills without signing with an ARES?
Energy efficiency and renewable energy are proven ways to save money on your bill. The cheapest energy is the one you never have to use in the first place, and reducing your home’s energy usage will go a long way towards saving on your bill. This can be done with efficient lighting, efficient appliances, and checking your home’s insulation and air-tightness. Having an energy audit done at your home can help determine the exact efficiency issues your home may be facing. These include:
- Poor insulation (aging, inadequate amount, poor coverage)
- Air tightness (air leaking in and out of a home through the walls, attic, windows, etc.)
- Inefficient appliances
- Leaky windows
- Duct leak/sizing issues
Residential solar is also a proven method of reducing energy costs. Rooftop solar can be a great investment, as long as you meet this criteria for your home:
- You own your home
- Your home is a good site for solar (faces south, east or west, little shade, flat roof)
- You plan to stay in your home long-term
The payback period for solar in Illinois averages 6 to 9 years, but all payback periods will depend on the size and complexity of your system, as well as your energy usage. Rooftop solar won’t completely replace your energy from the grid, but it will supplement it, especially if you can add a home battery system. State and utility incentives can also help with discounting the price. As with ARES, make sure to vet solar installers, and be wary of pushy sales tactics from door to door salespeople.
Community solar is also a growing option in the state. This involves subscribing to a portion of a community solar array (your portion will depend on your usage), which will supply a portion of your energy. Nothing gets installed at your home, and no electrical work is required. Community solar mainly acts as a consistent discount on energy bills. The Ecology Action Center’s program, in collaboration with PureSky Energy, provides a 10% discount on monthly energy bills. While community solar can be more convenient and more accessible than rooftop solar, it will not provide the same long-term savings that rooftop solar can. But either option is still an effective method to cut down on energy bills while supplying your home with clean, local energy.
Conclusion
With energy rates for the region forecast to continue rising, residents are understandably looking for any means to save on energy bills. Because of this, it is more important than ever for residents to be aware of what is and isn’t a good deal. ARES may seem like a good deal initially, but always read the fine print regarding introductory rates and automatic enrollment, otherwise you can be facing even higher energy bills than before. The safest bet will be sticking with your utility, or with an aggregation program if a consistent rate is most important to you. Reduce as much of your energy usage as possible through energy efficiency, or by changing your usage habits. Consider solar energy if it is feasible for your home, and watch for any rebates your utility may offer for energy efficiency work in your home. While rate hikes are frustrating, knowing your options and how to spot a bad deal can avoid even more frustration.