Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Ill.: Alternative Retail Electric Suppliers rate claim dismissed, (May 28, 2015)

By Jody Coultas, J.D.

North American Power & Gas, LLC (NAPG) was granted dismissal of a consumer’s Illinois Consumer Fraud and Deceptive Business Practices Act (CPA) claim for failure to show any deceptive or unfair practices on the part of NAPG, according to the federal district court in Chicago (Zahn v. North American Power & Gas, LLC, May 22, 2015, Kendall, V.). Also, the court lacked jurisdiction over the claim.

In Illinois, consumers are permitted to choose between traditional utilities like Commonwealth Edison and Alternative Retail Electric Suppliers (ARES) on a somewhat open market. NAPG, as an ARES, offered consumers an introductory rate for electricity that was lower than the Commonwealth Edison rate. After the introductory rate expired, NAPG offered a variable rate that was higher than Commonwealth Edison’s rate.

A NAPG consumer alleged that NAPG’s statements regarding the factors that could cause the rate to vary were misleading and led consumers to believe that the NAPG rate would vary consistently with the prevailing market price for electricity in violation of the CFA. NAPG sought dismissal of the claim arguing that the Illinois Commerce Commission (ICC) had exclusive jurisdiction over the dispute.

The court lacked jurisdiction over the complaint based on the ICC’s exclusive jurisdiction over the matter. The ICC has exclusive jurisdiction over disputes relating to the contracts between ARES and their customers. Although the customer framed the dispute as one seeking civil damages for fraud and breach of contract, it was essentially about rates because the injury alleged stemmed from the allegation that NAPG charged too much for electricity.

Also, the customer failed to show any deceptive or unfair practices on the part of NAPG, according to the court. NAPG disclosed how its rates were calculated and that the rates could vary based on “market prices for commodity, transportation, balancing fees, storage charges, [NAPG] fees, profit, line losses plus applicable taxes.” The customer did not present any evidence that NAPG’s electricity prices did not vary based on the factors cited. Also, the customer could have cancelled the NAPG service and returned to Commonwealth Edison at any time with minimal notice and without a fee.

The case is No. 14 C 8370.

Attorneys: D. Gregory Blankinship (Finkelstein, Blankinship, Frei-Pearson & Garber, LLP) for Peggy Zahn. James H. Ryan (Gordon & Rees, LLP) for North American Power & Gas, LLC.

Companies: North American Power & Gas, LLC; Commonwealth Edison

Cases: StateUnfairTradePractices IllinoisNews