Attorney General Lisa Madigan has filed a lawsuit against PALMco Power IL LLC (Palmco) for what the AG alleged was, "misleading customers about the true cost of switching their electricity supply from ComEd or Ameren to Palmco."

As summarized by a news release from the AG's office, Madigan’s lawsuit alleges that starting in at least January 2014, "Palmco charged its customers rates consistently higher than ComEd or Ameren’s rates after the introductory period ended. In fact, customers’ rates increased dramatically after the expiration of the introductory rate to levels that were over 300 percent of what they would have paid if they had stayed with their utility."

As summarized by a news release from the AG's office, the suit alleges that "Palmco’s sales pitch ... promised consumers will save money on their electric bills by switching to their electric supply. The company persuaded people to sign up by offering them a low introductory rate for two months. After that initial period, however, Palmco then switched customers to a variable rate that was invariably much higher than customers paid previously with other suppliers."

As summarized by a news release from the AG's office, Madigan’s lawsuit also alleged that Palmco sales agents, "made misrepresentations to consumers over the phone and via door-to-door sales, including representing that they were affiliated with the consumer’s utility, that the consumer’s utility was going out of business or changing its name, and that the consumer was required to sign up with Palmco. On multiple occasions, the company’s sales agents stayed on the phone during the automated third party verification system that Palmco used to complete its sales in violation of state law."

PALMco provided the following statement to RetailEnergyX.com: "PALMco is fully committed to addressing customer concerns in Illinois, and everywhere we do business. Over the past year, the company has made several changes to its operations. We have hired senior managers with extensive retail energy experience, and have focused on a number of cultural and operational improvements, including but not limited to, enhanced sales monitoring and oversight mechanisms, as well as new policies and procedures. PALMco is committed to a third party compliance audit, where we will seek to identify further improvements in our training, compliance and marketing functions and to developing some of the best practices in the industry."

The AG's office said that, "according to the Illinois Commerce Commission (ICC), ARES customers in the Ameren and ComEd territories paid $126 million more for electricity than traditional utility customers in 2016 alone."

The cited data includes municipal aggregation ARES sales in the overpayment calculation. As Illinois choice sales are dominated by muni aggregation sales, most of these overpayments result from customers not shopping and remaining with aggregation on an opt-out basis (see story here)

The AG's office also said that, "No alternative supplier is affiliated with or endorsed by your utility or the government."