Now Trending: Restraints on Retail Electricity Termination Fees

Illinois became the second US state this month to place restraints on retail electricity termination fees, with the passage of legislation (HB3766, SB 1312) on July 22 by the 99th General Assembly.

According to an investigative report by the Chicago ABC-TV affiliate, WLS, until the bills were signed into law by Governor Bruce Rauner, “some power companies would charge outgoing customers as much as $1,000 to get out of an agreement.”

The first bill (HB3766 enacted as Public Act 99-0103) limits early termination fees or penalties to $50 for residential customers and $150 for small businesses – regardless of whether they have signed a one-year or multi-year contract.

The second piece of legislation (SB1312 enacted as Public Act 99-0107), specifies that the caps will apply only to early termination of electric service – and “shall not apply to charges or fees for devices, equipment, or other services provided by the utility or alternative retail electric supplier.”

According to the TV news report, there are already similar laws on the books in Illinois for alternative gas suppliers.

Such provisions seem to be trending: Earlier in July, the three-member Rhode Island Public Utilities Commission found that customers should not be assessed for switching from National Grid, the state’s dominant utility, to any retail competitor that offered lower rates.

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