TORONTO - New rules for electricity retailers in Ontario will help "clean up the industry" and provide consumers with better information and more protections, Energy Minister Brad Duguid said Wednesday.
The government has been getting far too many complaints about unscrupulous energy retailers, so new rules kick in next year to make the industry more responsive to consumers' concerns, said Duguid.
"I'm frankly tired of receiving 100 to 150 calls a week to the Ontario Energy Board with complaints against the practices of energy retailers when it comes to sales," he said in an interview.
"It's time to put an end to that, and as of Jan. 1, there will be rules in place that will ensure that that will no longer take place in Ontario."
Many complaints stemmed from the fact consumers believed the private energy retailer was affiliated with their local utility and thought the contract would guarantee prices lower than the utility charged.
The new rules stem from legislation introduced last December to crack down on what the government called abusive and unfair practices by energy retailers.
"In my view this is really going to clean up the industry to ensure that consumers have protection," said Duguid.
"We're going to be watching it closely though, because the regulations do give us the power, that if we continue to get 150 calls a week, we have the power to move even further in some areas."
The board could issue fines or even revoke a company's licence if it doesn't comply with the legislation, added Duguid.
Retailers will have to give price comparisons with rates charged by local utilities, which are set by the Ontario Energy Board and adjusted every six months. Some consumers choose to sign up with an energy retailer to get a fixed price for the length of the contract rather than see their rates vary twice a year.
There will be several opportunities for people to cancel long-term energy contracts without penalty, even after receiving their first bill.
Penalties for broken contracts will be reduced to $50 per year remaining for electricity, and $100 per year remaining for natural gas.
Direct Energy, one of the largest players in the retailing of energy in the province, said all energy sellers have to be as transparent and responsive to consumers as possible.
"We know that consumers want more from their energy providers. That's why we are committed to ensuring they are fully informed about their energy choices," said Tanis Kozak, Direct Energy's general manager for Canada.
Both opposition parties had called on the government to protect consumers from the bad practices of some sellers, with the New Democrats wanting a ban on door-to-door sales by energy retailers.
The Liberal government is unveiling the new rules now because of all the heat it's been taking over rising electricity bills, said Progressive Conservative critic John Yakabuski.
"They want to be seen as protecting consumers because it's the consumer that has been taking it on the chin from these guys for the past several months when it comes to electricity rates, backdoor charges and extra taxes like the HST piled onto their hydro bills," said Yakabuski.
"The (Liberals) are looking to at least put something out that could be viewed by consumers as positive, but people won't forget this is the very government that has driven those hydro bills into the stratosphere."
One arcane aspect of Ontario's complicated electricity system is the so-called Provincial Benefit, which is the consumer's share of the difference between government-regulated and contract prices for electricity paid to generators and the market prices they would have received had they not been subject to regulation.
The Provincial Benefit can be a credit or a charge to the energy consumer. It is already included in the electricity line charge on bills from local utilities, but is not included in the contract price offered by energy retailers and is shown as a separate item.
