Illinois Alternative Retail Electric Supplier Requirements

A company that wants to sell retail electricity in Illinois must meet the state’s requirements for alternative retail electric suppliers, a regulated category the Illinois Commerce Commission (ICC) calls ARES. The core requirements are a certificate of service authority from the ICC, a surety bond scaled to the customer class, and ongoing compliance with rules on pricing disclosure, contract terms, marketing conduct, renewable energy procurement, data security, and complaint handling. Both the ICC and the Illinois Attorney General can enforce these obligations.

ICC Certification

Before serving a single customer, an ARES must file a verified application with the ICC. The Commission evaluates whether the applicant has adequate technical, financial, and managerial resources for the service it proposes to offer, taking into account the size and financial sophistication of the customers it plans to serve and whether it owns or controls generation.¹

Certification isn’t a one-time hurdle. A certified ARES must keep meeting the same standards that qualified it, and the ICC can revisit those qualifications at any time.² Any supplier marketing to residential and small commercial customers must also file customer complaint and resolution procedures with the ICC before it begins marketing, and update those procedures each year.³

Surety Bond

Every ARES must post a surety bond before receiving its certificate. The required amount depends on which customers the supplier plans to serve:

$30,000 to serve only large nonresidential customers with peak demand of one megawatt or more
$150,000 to serve nonresidential customers using more than 15,000 kilowatt-hours per year
$300,000 to serve all eligible retail customers, including residential households

The bond must stay in force for at least one year and is designed to protect customers if the supplier fails to meet its obligations.⁴ Any supplier intending to serve residential customers sits in the top tier.

Disclosure and Pricing Transparency

A supplier serving residential or small commercial customers must provide a Uniform Disclosure Statement with each contract. The statement must set out the rate the customer will pay, whether that rate is fixed or variable, any monthly fees, and the customer’s right to cancel.⁵

Current pricing must also be posted on the supplier’s website without requiring a login. That includes fixed monthly charges, per-kilowatt-hour rates, and early termination fees for every variable, time-of-use, and fixed-rate residential product offered.²

On top of the point-of-sale disclosures, each ARES files annual rate reports with both the ICC and the Attorney General, listing every distinct rate charged to residential customers during the prior year and whether that rate was fixed or variable.²

Contract Terms and Cancellation Rights

Residential and small commercial contracts must include a term letting the customer terminate at any time without a termination fee or penalty. The only charges that can survive cancellation are for devices, equipment, or other non-electrical services.⁶

A separate rescission window runs for ten calendar days after the date on the utility’s written confirmation that the customer’s supplier is being switched. The customer can rescind by calling the supplier or the utility.⁵

Marketing and Switching Rules

A supplier cannot switch a customer’s service without verifiable authorization. Documented customer consent must be obtained in a format the ICC has approved and that is consistent with the Consumer Fraud and Deceptive Business Practices Act.²

Suppliers also cannot block a customer’s access to the local utility. No contract can prevent a residential or small commercial customer from returning to utility service, and no supplier can charge for that access.²

Renewable Portfolio Standard Compliance

ARES must participate in Illinois’ Renewable Portfolio Standard on a compliance path separate from the utilities. The Climate and Equitable Jobs Act, signed in 2021, set the RPS at 40% by 2030 and 50% by 2040, with the requirement rising at least 3% each year.⁷

A supplier can meet its obligation by generating electricity from renewables, buying renewable electricity, purchasing renewable energy credits (RECs), or making alternative compliance payments. The renewable resources or RECs must come from generators in Illinois or nearby states inside the PJM and MISO regional transmission footprints, and the credits must have been generated during the compliance year or the two preceding years.⁸ The alternative compliance payment rate is set by the ICC.

Data Privacy and Breach Notification

Because an ARES handles names, addresses, Social Security numbers, and account information, it falls under the Illinois Personal Information Protection Act.⁹

If a breach occurs, the supplier must notify affected Illinois residents without unreasonable delay and at no charge. When a breach affects more than 500 Illinois residents, the supplier must also notify the Attorney General, who may publish the name of the breached company, the types of information involved, and the date range of the breach.¹⁰

Violations are treated as unlawful practices under the Consumer Fraud and Deceptive Business Practices Act. For improper disposal of personal information, the Attorney General can seek civil penalties of up to $100 per affected individual, capped at $50,000 per incident.¹⁰

Penalties for Noncompliance

After notice and a hearing, the ICC can fine a supplier up to $10,000 per occurrence for Public Utilities Act violations. If the supplier keeps violating a rule after the ICC issues a cease-and-desist order, the penalty rises to $30,000 per day. The Commission can also modify, suspend, or revoke a certificate of service authority for substantial or repeated violations, which ends the supplier’s ability to operate in Illinois.¹¹

The Attorney General can bring a separate civil action under the Consumer Fraud and Deceptive Business Practices Act seeking injunctions, restitution, and civil penalties up to $50,000 per violation. Where a court finds intent to defraud, the penalty can reach $50,000 for each individual violation, and violations targeting consumers aged 65 or older carry an added $10,000 per violation.¹² The two channels run independently, so a supplier can face ICC action and an Attorney General lawsuit at the same time.

Customer Complaint Procedures

Beyond filing resolution procedures with the ICC, suppliers should expect customer disputes to arrive through the ICC’s informal complaint process, where a consumer counselor works with the supplier and customer to resolve the issue, typically within one to 14 days. Customers can also escalate to a formal complaint before an administrative law judge, filed within two years of the service at issue or within two years of when the customer first learned about an incorrect bill.¹³ A formal complaint resembles a court hearing, with testimony and evidence.

1
Illinois General Assembly. Illinois Compiled Statutes 220 ILCS 5/16-115 – Certification of Alternative Retail Electric Suppliers
2
Illinois General Assembly. Illinois Compiled Statutes 220 ILCS 5/16-115A – Obligations of Alternative Retail Electric Suppliers
3
Legal Information Institute. Illinois Administrative Code tit 83 412.310 – Required ARES Information
4
Illinois General Assembly. 83 Illinois Administrative Code 451.50 – License or Permit Bond Requirements
5
Legal Information Institute. Illinois Administrative Code tit 83 412.115 – Uniform Disclosure Statement
6
Illinois General Assembly. 83 Illinois Administrative Code 412.110 – Minimum Contract Terms and Conditions
7
Illinois Power Agency. Renewable Portfolio Standard Factsheet
8
Illinois General Assembly. 83 Illinois Administrative Code 455
9
Illinois General Assembly. Illinois Compiled Statutes 815 ILCS 530 – Personal Information Protection Act
10
Illinois General Assembly. Illinois Compiled Statutes 815 ILCS 530 – Personal Information Protection Act
11
Illinois Commerce Commission. ICC Order 21-0793 – Section: Applicable Legal Standards
12
Illinois General Assembly. Illinois Compiled Statutes 815 ILCS 505/7
13
Illinois Commerce Commission. File a Complaint