2 Investigators: Beware Of Alternative Electricity Pitches

CHICAGO (CBS) -- A warning: watch out for calls offering you a new rate on your electricity.

As Pam Zekman reports you could end up paying more than you are now.

A phone message was left for CBS 2 Executive Producer Marda LeBeau: "Hello, this is Ms. Sanders, I've been trying to reach you regarding an important matter."

It was left by a salesperson for an alternative power company.

LeBeau called back to hear the pitch from another salesperson.

"Your company is named Life Energy? So you're not ComEd?" LeBeau asked the person.

"You're offering 8.56 cents per kilowatt hour."

It was a one-year fixed rate deal now being offered by a company called Life Energy, based out of Texas.

The problem is, currently LeBeau is only paying 6.89 cents a kilowatt for power from ComEd. That is information you can get if you carefully read your electric bill.

"He did concede that my current rate was lower than what they were offering me but he said the advantage would be that I would have a fixed rate," LeBeau said.

"This is a bad deal plain and simple," said Jim Chilsen from the consumer advocacy group, Citizens Utility Board. "Life Energy's so called protected rate is 20 percent higher than ComEd's price over the next year."

It's perfectly legal for competing companies to sell power, but consumer advocates say be wary of misleading sales pitches.

We played the rest of the message left by Life Energy for Chilsen.

"I've been trying to reach you regarding important matter about the supply charges on your electric account, give me a call back ... and have a copy of your statement with you to review," said the voice leaving the message.

"We're always concerned about pitches that have people get their bill out and don't identify the company and make it sound like it could possibly be a call from ComEd," Chilsen said.

Life Energy also told LeBeau that ComEd's rates were going up

"How do you know the ComEd rate could go up to 11 cents next year?" LeBeau repeated as she talked to the salesperson.

"That is just fear mongering and its dead wrong," Chilsen said. "ComEd's rate is going to hover around seven cents per kilowatt hour the next year."

Another concern: The salesperson told us that after a year Life Energy's rate will be "variable."

"That is a major concern," added Chilsen

CUB says consumers with other alternative suppliers have seen big increases.

"It switched to a variable rate and their bill absolutely skyrocketed," Chilsen recalled.

Dan Sullivan, a Life Energy spokesman, says it typically tries to convert a client who's fixed rate deal runs out to another fixed rate deal rather than switch to a variable option.

And he says the customer service reps are supposed to volunteer the company name, and not give inaccurate information about competitors rates.

"We don't approve of that," he said, adding the company will investigate.

"Life Energy works with several call centers, all of whom are required to follow LifeEnergy's approved sales scripting and strict quality standards," Sullivan said.

If you want to learn about alternative power suppliers you can go to a Citizen Utility Board link www.cubhelpcenter.com