The Ontario Energy Board sets prices in the province and oversees such utilities as natural gas, local hydro utilities, and is supposed to ensure that energy retailers obey all the rules.
In an interview on June 19 OEB spokesman Paul Crawford said the OEB received about 6,000 phone calls in 2008. He said of those, “Some are comments. Some are questions. A lot are complaints.”
The OEB has the power to levy fines against energy retailers who fail to follow the rules. When asked how many fines have been levied, Crawford said, “There have been the four.”
On Dec. 22, the OEB stated it planned to levy a fine against Universal Energy Corporation under the Ontario Energy Board Act, “requiring Universal Energy Corporation to pay an administrative penalty in the amount of $200,000 for contravening certain enforceable provisions of the act.”
The board stated the fine was based on evidence obtained through a formal review of selected Universal recorded reaffirmation calls made in March, April and May 2007.
“As part of a formal review initiated in September 2007 the board finds that in 57 recorded calls with low volume electricity consumers, Universal has contravened section 88.4 of the Act, in that it has engaged in an unfair practice by making false, misleading or deceptive statements to low volume consumers.”
Those statements included:
– an electricity price protection program is being offered because the OEB or the government is cancelling the Regulated Price Plan in May 2008;
– consumers will become subject to the true cost of power and will pay market prices for electricity starting in May 2008; and
– the government is deregulating electricity prices or removing the price cap in May 2008.
The OEB also found that Universal, in three transactions, contravened the act in that it has engaged in an unfair practice by making false, misleading or deceptive statements to consumers as follows:
– consumers currently pay subsidized electricity rates;
– consumers will become subject to the true cost of power in 2009 as the government is scheduled to remove the subsidy;
– the government is paying a portion of your electricity bill monthly;
– the government may cancel the regular rate adjustment in 2009; and
– consumers will be subject to paying the true cost of hydro which fluctuates.
The OEB also found that in seven transactions Universal was non-compliant with the Board’s Electricity Retailer Code of Conduct.
After a defence by Universal, three of the seven transactions that were identified in the notice were withdrawn.
The OEB also stated that Universal told the OEB that it would comply with the rules in the future, and so the OEB allowed Universal to pay a reduced fine of $127,500.
Shortly after the Marketplace program, Power of Persuasion, aired in March, Universal was charged again – and fined $60,000.
Summit Energy was also fined in January for making similar misleading statements about the price of electricity. That fine was first set at $100,000. Again, that company assured the board that it would comply with the act and stop its illegal practices, and the fine was reduced to $70,000.
Direct Energy was also fined $15,000.
Crawford said those were the only fines because “There wasn’t evidence enough” of wrongdoing.
He added that if there is a dispute between a client and the energy retailer, the OEB’s first step is to try to “get the parties talking to see if there’s a resolution.”
But, he added, “This year, we went to the fines.”
Protecting consumers
One of the functions of the OEB is to protect consumers. Crawford said that the OEB will make presentations to groups about the cost of electricity and natural gas, and he said it prefers to focus on “new Canadians and seniors.
“There’s more confusion [among that group] from what we’ve seen in our call centres,” he said.
Crawford said that people need to make sure of what they are signing because once they sign a contract it may be too late.
The Marketplace program highlighted the high pressure tactics that companies sometimes use to get customers to sign.
Marketplace also noted a contract that was supposed to have been signed by a homeowner who had died three weeks before the contract date. Someone had allegedly forged his signature.
That is why Crawford advised that no one should show a hydro bill to a retail salesman.
“We advise that they not show it because [they] need that person’s information to sign the contract,” Crawford said. He said there have been other complaints about forged contracts.
Crawford said hydro users would be well advised to visit energychoiceontario.com before they sign a contract with anyone. He said that site has been running since 2007, and it offers information in 13 different languages.
It provides a list of all licenced distributors and people can also compare the rates they are being offered with local utility rates. More important, they can look at the historical pricing for such things as hydro in Ontario, which have been remarkably stable for many years.
“It gives you a good snapshot” of information needed before signing an energy contract, Crawford said.
But, he noted, the OEB has no control over the prices that the energy retailers charge.
As for local hydro distributors who are not allowed to tell people they should forego using energy retailers, Crawford said it simply would not be good practice to downgrade competition in any case.
“I don’t know many [commercial] sectors that would operate that way,” he said.
He added that if staff at a local utility is asked what to do, they can tell people considering retailers’ offers about the website. Or they can also visit www.oeb.gov.on.ca.
As for those who do not have computers or internet access, Crawford said they can contact the Ontario Energy Board at 1-888-632-6273 or contact the Consumer Relations Centre at 416-314-2455 or toll-free at 1-877-632-2727.
