Overview: Three natural gas utilities in Illinois have customer choice programs that allow their residential customers to buy natural gas from competitive suppliers. As of December 2009, about 271,000 residential customers were participating, down from the 277,860 participating in December 2008 but more than in the previous 2 years (234,763 and 206,776, respectively). All customers of Nicor Gas Company (formerly Northern Illinois Gas), the State's largest local distribution company with more than 50 percent of the residential customers, became eligible for choice in March 2002. Since then, enrollment by the company's residential customers has more than tripled, from 65,833 in March 2002 to about 218,000 in February 2010. Customers can change suppliers at any time or resume service with Nicor Gas, although they may be subject to penalties or supplier exit fees, depending on the terms of their contract. To withdraw from the program, customers must notify the supplier. Once they have returned to service with Nicor Gas, they have 120 days to choose another supplier or they will remain with Nicor Gas for 1 year. In Nicor's recent rate case (March 2009), the Illinois Commerce Commission (ICC) extended the time that a customer has to select a new supplier from 45 to 120 days. It also specified that Nicor make its residential customer mailing list available to select suppliers and continue to meet with interested stakeholders.

ICC also approved choice programs for residential and small business customers of Peoples Gas and Light Company and North Shore Gas Company in March 2002. Enrollment limits were set at 13 percent for the first year, 24 percent for the second year, 33 percent in the third year, and no limits after April 30, 2005. In January 2007, Peoples Gas and North Shore became subsidiaries of Integrys Energy Group, Inc. As of January 2010, these two firms had about 53,000 residential customers enrolled in choice programs, or nearly 6 percent of their residential customer base. Customers may choose to discontinue service under the program, but must choose another supplier within 60 days. Otherwise, customers must stay with the utility for a 12-month period.

The Citizens Utility Board (CUB), the State’s consumer advocacy group, continues to be critical of the State's choice programs and claims that almost no one has saved money by switching to marketers. In addition, CUB asserts that Nicor and People's Gas and Light Company/North Shore Gas Company do not provide enough information to allow consumers to make meaningful comparisons of the various price offerings by marketers. In conjunction with the American Association of Retired Persons (AARP) and Citizen Action Illinois, CUB filed a complaint with ICC against U.S. Energy Savings Corp. in March 2008, claiming this marketer misrepresented itself as a regulated gas utility or the government in addition to other violations of the Illinois alternative gas supplier law.  The State Attorney General filed suit against U.S. Energy Savings in February 2008 alleging that the company sold fixed-rate gas contracts using misleading sales tactics that falsely promised significant consumer savings. The Attorney General reached an agreement with the marketer in May 2009 that allowed affected consumers to terminate contracts and collectively receive up to $1 million in restitution.

In April 2009, the Illinois Governor signed an amendment to the Alternative Gas Supplier Law (SB 171) requiring marketers to provide clear disclosure of prices, terms, and conditions of all products and services in their sale solicitations.  This legislation also prohibits suppliers from misrepresenting themselves and provides consumers with rights to withdraw from service if they find that the service is not as promised. As of December 2009, ICC had certified 16 companies as alternative gas suppliers, 11 of which serve residential customers. Eleven suppliers serve customers in Nicor's service area, 7 companies in Peoples' area, and 5 in North Shore's area. A year earlier 12 suppliers served customers in Nicor's area, 10 in Peoples' area, and 7 in North Shore's area.

A new law (Public Act 95-1051) that took effect April 10, 2009, expanded consumer rights and protections. In accordance with Section 19-125 of the Public Utilities Act, the ICC website now includes consumer education information to help residential and small commercial customers understand their gas supply options and their rights and responsibilities. The educational information includes choices available, guidance for selecting an alternative gas supplier, comparisons of the prices and terms of products offered by alternative suppliers, and procedures for addressing complaints.