Courts – not the ICC – have jurisdiction over rate cases involving an ARES, said the Supreme Court of Illinois. In a unanimous opinion written by Chief Justice Karmeier, the Court in December answered the Seventh Circuit’s certified question whether rate claims against ARESs are under the jurisdiction of the ICC or the courts under the Illinois Public Utilities Act.
The case arose when a residential electricity customer signed up to receive her power from an alternative retail electric supplier (“ARES”) instead of her local public utility. She was attracted to low teaser rates that were to apply during her first month of service. The ARES’ advertisement warned that the “market based variable rate” that was to apply after the first month could be higher than the public utilities’ rates, however the ARES never applied the promotional rate to the first month. Each month the ratepayer paid around three times the rates of her local utility. The ratepayer filed a federal court class-action suit against the ARES in the Northern District of Illinois under diversity jurisdiction, bringing common-law claims as well as claims under the Illinois Consumer Fraud and Deceptive Business Practices Act. The ARES filed a motion to dismiss, claiming that the court did not have jurisdiction to hear the case because rate disputes are in the exclusive jurisdiction of the Illinois Commerce Commission (“ICC”).