The provincial government is proposing some new rules that might provide protection for energy consumers and allow for greater energy conservation through suite metering.
Last week, the government introduced legislation that would, if passed:
– protect consumers from hidden contract costs, excessive cancellation fees, "negative-option" contract renewals, and other unfair industry practices.
– provide greater fairness and transparency for consumers through rate comparisons, plain language contract disclosure, enhanced rights to cancel contracts, and a new licensing and training regime, including mandatory oral disclosure and identification badges.
– enabling individual suite metering in apartment buildings, which gives tenants more control over energy costs.
– granting the Ontario Energy Board more authority to set policies on security deposits and shutting off an individual’s electricity.
The move to rein in energy retailers comes after hundreds of complaints by consumers who have found themselves paying far more for hydro to energy retailers than they would if they had remained with their local hydro service.
On July 3, The Wellington Advertiser published a front page article demonstrating some of the tactics used by energy retailers. They go door to door in communities and are very aggressive in their sales techniques. In at least one case, a salesman forged a signature and signed a contract for someone after getting a look at the homeowner’s hydro bill.
That contract was eventually dropped when the homeowner was able to demonstrate that her husband had been dead three weeks before the contract’s signing date.
Collingwood Mayor Christopher Carrier complained about retailers tactics and wrote his concerns to then Minister of Energy George Smitherman and cited the huge number of people and large number of dollars that fall into the hands of energy retailers every year.
He investigated how many of his residents were signed with energy retailers, and was shocked at the answer.
“It turns out that at present approximately 1,800 or 12% of our account holders have signed contracts with electricity retailers,” he said in June.?“Through the 12 months in 2008, those 1,800 residential and small commercial customers paid $1,007,569 more for the energy portion of the bill than the true cost of power.”
Centre Wellington Hydro has estimated its residents have paid over $500,000 more for power through energy retailers.
A spokesman at Wellington North Power said that president and Chief Executive Officer Judy Roseburgh has stated the steps taken by the provincial government is a move in the right direction when it comes to protecting consumers.
In the past three years, energy retailers have cracked the top 10 list of consumer complaints received by the Ministry of Consumer Services. Some consumers are told they will save hundreds of dollars by purchasing five year contracts that start with higher rates than local power providers. Retailers often say those rates are going through the roof, and they will be protected.
The reality is nobody signing contracts with energy retailers has saved any money since 2005.
And currently, the Ontario Energy Board logs between 100 and 150 consumer complaints a week about the practices of energy retailers.
Centre Wellington Hydro General Manager Doug Sherwood believes that the provincial moves is “definitely a start.”
He particularly likes the idea that people can cancel their energy retailer contracts within 30 days of signing.
"This will work providing all the applicable charges for the full term of the contract are reflected in the first bill.”
Sherwood noted that the article in the Advertiser, caused some people to not renew their contracts. He said he has seen some people who are now returning to the local hydro provider.
But, he added, another 30 new customers have registered with energy retailers recently.
“You can always tell when they’ve been in town,” he said.
Centre Wellington Hydro bills customers. But it must collect cash for energy retailers and hand it over to them if a customer has registered with they.
Sherwood is especially concerned about retailers claiming at the door that they represent Centre Wellington Hydro.
“That is not true,” he said. “We never send people door to door. We never ask people to show us their bill. Why would we? We print the bills ”
Sales agents who forge names onto contracts use hydro bills for contract information. They are paid up to $100 for each person they register. In the past, they would forge the name of the homeowner, use the number from the hydro bill, and by the time the consumer complained, they had moved on. The company blames the sales agent, and insists on high fees from the consumer to break the contract.
The government press release announcing the proposed Energy Consumer Protection Act, 2009, states it “would ensure Ontarians have the information they need about electricity contracts and bills, as well as the comfort of knowing they can rely on fair business practices. If passed, the proposed legislation would help families make wise and informed energy choices. Many of the provisions resulting from the proposed legislation, should it pass, would involve consultation and be set at a later date by regulation.”
Sherwood said consumers should read their hydro bills each month. He said he often hears complaints from consumers months after the energy retailers have started billing. If that is the case, even the 30 day cancellation period after signing a contract would not do them any good.
