Price comparison proposal gets zapped

Ontario Energy Price Comparisons help consumers evaluate regulated price plans versus retail fixed-rate contracts, factoring time-of-use pricing, the provincial benefit, delivery charges, and OEB tools like the electricity rate calculator for transparency.

A proposal that would require electricity retailers to give consumers a side-by-side price comparison, showing what they would pay with or without an energy contract, has been quietly ditched by the Ontario government.

Unscrupulous energy contract salespeople have made the province’s top-10 list of consumer complaints for years, even as it cracks down on energy retailers across the market.

In response, the province passed the Energy Consumer Protection Act as part of better consumer protection rules for Ontario overall, which is due to come into force January 1.

One of the stated goals of the act is “providing greater fairness and transparency for consumers through rate comparisons.”

Last December, the province released for discussion a draft “electricity retail contract information” form that retailers would be required to give prospective customers.

The form included a side-by-side comparison of what a consumer could expect to pay for the next year if he or she stayed with the provincially regulated price, and what he or she would pay under a retail contract. The price comparison was based on consumption of 800 kilowatt hours a month.

But that proposed form has now disappeared from the Ministry of Energy website.

The task of drafting new rules for energy retailer is now in the hands of the Ontario Energy Board, which has drafted its own consumer information form. But the board’s form, too, lacks a side-by-side price comparison.

A spokesman for Energy Minister Brad Duguid said the side-by-side comparison form was removed from its website “to avoid confusion” with energy board proposals, despite the price comparison promise made earlier.

Julie Girvan, energy consultant for the Consumers Council of Canada, said direct price comparisons are helpful for consumers.

“Any information that can help consumers make comparisons is useful, and I think it’s important,” Girvan said in an interview.

Electricity bills are hard to understand, she said, and the energy board and utilities should be focusing more on educating consumers about them, including choosing an energy supplier wisely:

“We all need to step back and think about what’s useful for consumers.”

She noted that the new act was passed because consumers have frequently been confused or misled about power contracts in practice.

Alan Findlay, spokesman for the energy board, said the form is intended to set out “key pieces of information” for consumers.

Findlay said it’s difficult to make direct price comparisons. The regulated hydro price is adjusted regularly, he said, so it’s impossible to say with certainty what the price will be in a year’s time.

Time-of-use pricing also makes comparison hard, he said, since consumers who use a lot of power at peak periods will pay more than those who don’t.

Similarly, the “provincial benefit” – an extra charge added to fixed price contracts – changes monthly, so it can’t be projected into the future.

For the first six months of this year, the provincial benefit has been about 3 cents a kilowatt hour. That means if you signed a contract for a fixed price of 7 cents a kwh, you’d pay a total of 10 cents a kwh, plus delivery, regulatory and debt retirement charges.

Consumers interested in making direct price comparisons can go the board’s website, Findlay said. It has a calculator that allows consumers to compare retailer prices with non-contract price.

The role played by energy retailers in dropping the side-by-side comparison is hazy.

The province asked for comment on its proposed information forms, and said comments received would be on the public record.

But the ministry website says comments received from retailers did not come in a form that could be uploaded onto the website, so they can’t be viewed.

Tanis Kozak, general manager of retailer Direct Energy, said her firm had made a submission, but didn’t say whether the firm asked for the direct price comparisons to be dropped.

“Direct Energy has already proactively introduced meaningful new consumer protection initiatives including plain language contracts and disclosure statements,” she said in a written statement.

“Our priority is to ensure the Ontario market is best-positioned to deliver on the benefits of competitive energy markets to consumers while protecting consumer interests at the same time.”

In backing away from requiring direct, side-by-side comparisons, the province is moving in the opposite direction from other retail sectors.

The federal government, for example, has adopted new rules requiring credit card companies to spell out what it will cost customers if they don’t pay off their balance promptly.

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