Illinois Commerce Commission Rules That Natural Gas Variable Rates Do Not Need To Match Rate Provided By Default Service Provider

December 8, 2020

December 2, 2020, the Illinois Commerce Commission (“ICC” or “Commission”) issued a proposed order (“Proposed Order”) in a complaint proceeding initiated by a consumer against Spark Energy Gas, LLC (“Spark Energy”) asserting that the consumer was overcharged for natural gas usage by 50%-300% between January 2013 and November 2019.  Specifically, the consumer argued that Spark Energy billed him at a rate well in excess of the rates offered by Northern Illinois Gas Company d/b/a Nicor Gas Company, the default service provider.

In the Proposed Order, the ICC rejected the consumer’s arguments and dismissed his complaint for several reasons.  First, the ICC noted that the consumer had not identified any relevant statute or Commission rule that had been violated.  The complaint did refer to violations of 83 Ill. Adm. Code 280.5.  However, the ICC dismissed this reference as irrelevant because that code section governs public utilities and Spark Energy is not a public utility.  However, more significantly, the Commission also explicitly ruled that “it is not a violation … to charge more than the default service provider for gas supply.”  The Commission continued that it agreed with Spark Energy that a supplier is not necessarily even required to charge “market rates” when offering a “variable rate.” 

The Proposed Order is not yet final and will be potentially subject to challenges later this month under the Commission’s rules.  However, for now, it appears that the ICC will not be a receptive forum to complainants seeking to impose the rate offered by a default service provider as a cap on the competitive marketplace. 

If you have any questions regarding the above decision or enforcement proceedings challenging energy supply rates more generally, please contact Charles A. Zdebski at 202.659.6655 (czdebski@eckertseamans.com), Deanne M. O’Dell at 717.255.3744 (dodell@eckertseamans.com), Jeffrey P. Brundage at 202.659.6676 (jbrundage@eckertseamans.com), or Robert J. Gastner at 202.659.6674 (rgastner@eckertseamans.com).

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