SCOTT SIMPSON, Vancouver Sun, February 24, 2010
Utilities commission also denies request to include ad material in Terasen bill statements
The British Columbia Utilities Commission has shot down a bid by natural gas marketers to widen their access to the B.C. residential gas market.
In its decision, the commission spurned several marketer-driven recommendations, including allowing telephone sales of gas contracts and variable rates that would directly compete with Terasen Gas.
The commission also rejected the marketers' request for "open access" to Terasen customers through the inclusion of advertising material in the senior utility's monthly bill statements.
Gas marketers gained access to the B.C. market in 2007, and 16 per cent of residents on the Terasen residential gas pipeline network now contract with third-party gas marketers to purchase gas at fixed prices for terms of one to five years.
Terasen continues to sell gas on a revenue-neutral basis, employing a variable rate that reflects recent prices on the North American commodity market, and bills all customers on its pipeline for delivery and related services.
The commission's orders are derived from a meeting last year among Terasen, marketers and other stakeholders, as the BCUC continues to modify and simplify the Customer Choice program, in which marketers are permitted to solicit and expand their business.
Marketers rely on door-to-door sales people to solicit contracts with residents, and statistics on the BCUC website show 35 per cent of signed contracts are disputed later.
Terasen last year suggested in a report to the BCUC on Customer Choice that many gas marketers' customers are likely concerned that they are locked into fixed-price contracts when North American natural gas prices appear to have stabilized at about half the price of gas just two years ago.
One of the marketers, Just Energy, said Tuesday it is pleased with the commission's orders, but continues to believe B.C. residential gas customers would ultimately benefit from a further opening of the market.
Just Energy representative Gord Potter said deregulation has led to "chaos" in some markets, and lauds B.C.'s "slow, measured, deliberate approach." However, he said he believes the market is ready for additional competitive opportunities.
"Currently, the utility allows us to bill a charge for the [gas] supply portion, but as is becoming more the case in some of the other markets we'd like better access to the billing," Potter said in an interview.
Marketers would like to purchase opportunities in Terasen bills to advertise and promote related products such as gas furnace installations and maintenance contracts, and to gain BCUC assent to use the bills to collect monthly instalment payments for devices such as furnaces and hot water tanks.
According to Erica Hamilton, secretary of the BCUC, the commission believes those types of initiatives would fall outside its regulatory mandate and exceeds the intent of the Customer Choice program, although marketers are already free to send separate bills for those types of services. "In Ontario, the utility allows you to bill for those products on the bill as a second line item, so we'd like to see an opening of [access to] the bill," Potter said.
The commission also took action to give consumers a more substantial cooling-off period after signing contracts with gas marketers.
Immediately after residential customers sign contracts, sales representatives are supposed to submit the contracts for so-called third party verification, in which an agent of the marketing company verifies by telephone that the customer is satisfied with the contract and understands its terms.
However, the commission has decided customers are entitled to a minimum 24-hour delay between the deal at the door and a third-party verification process in which the deal is formally accepted.
The commission said the delay will provide customers the opportunity to familiarize themselves with the contract offer, and "eliminate the possibility of a person feeling undue pressure to complete the sale due to the presence of the salesperson and pace of the offer."
The commission also indicated it wants to work with marketers to develop a standard script for all third-party verifications.
ssimpson@vancouversun.com
