Beware of energy retailers

In recent years, the price of electricity has increased substantially. Monthly bills that once were affordable have risen to the point that many people are struggling to make ends meet.
This has led many to enter into contracts with energy retailers, who promise savings and protection from high prices.
Unfortunately, most consumers end up paying more.
Energy retailers are private, for-profit companies whose prices are not regulated and who buy—and then re-sell—electricity or natural gas from your local utility.
In other words, they are expensive middle men.
So why do people sign up? There are two reasons. The first is that the high cost of electricity has made consumers desperate and vulnerable.
The second is the fact that most consumers are signed up on the doorstep, where unscrupulous sales people can gloss over the facts and lead them to believe they will save money.
The truth is, it is virtually impossible to save money. In fact, a 2009 exposé done by the CBC’s “Marketplace” showed that since energy retailers were allowed by former premier Mike Harris to sell for-profit electricity contracts in Ontario, a grand total of zero people had saved money.
The reason for this is a cost called the “Global Adjustment,” which is charged separately to consumers who have signed on with private energy retailers.
On the doorstep, consumers generally are led to believe the rate they are being shown—their contract price—is the rate they will pay. In reality, they will be paying the contract price plus the “Global Adjustment.”
As of the time that I’m writing this column, one energy retailer was advertising a contract rate of 5.99 cents per kilowatt hour on their website.
What they do not obviously disclose is the fact that the “Global Adjustment” currently is 8.72 cents per kilowatt hour, meaning the actual price would be $14.71 cents per kilowatt hour 24 hours a day.
This rate far exceeds the on-peak rate charged only a few hours per day by public utilities.
So this means if a person were to sign up today and only use electricity during the peak—and most expensive—time of the day, they still would be paying significantly more than they would if they remained with their public utility.
While the province made some changes that require retailers to provide customers with copies of the contract, increasing the opt-out period to 30 days after the first bill arrives, and setting maximums for cancellation fees, consumers continue to be misled.
Proving a violation has occurred is nearly impossible because the sale happens on the doorstep.
For consumers, the best practice is to just say no. Don’t let retailers see your current bill. Don’t sign anything on the doorstep.
Politely ask them to leave and if they refuse, call the police.
The government has a long way to go before consumers are protected from energy retailers. But for right now, the best protection is awareness.
If you or someone you know has signed a contract and needs help, or if you have questions, call Kelly at my Dryden constituency office (1-800-465-8501).

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