Natural gas marketers hit streets

Allison Lawlor
Globe and Mail
May 11, 2001

Natural-gas marketers are descending on the greater Toronto area offering consumers fixed rates after a winter of soaring prices.

Homeowners who saw natural-gas prices increase more than 50 per cent in the past year have become the focus of advertising campaigns and reams of promotional material from gas companies that want to sign them to multiple-year contracts.

For Roger Pepler, the recent advertising is puzzling.

“I feel lost in it,” said Mr. Pepler who lives on the Toronto Islands. “I don’t follow the energy markets well enough to access the various offers so that you are accessing apples and apples.”

Some experts are warning consumers against signing long-term contracts at high prices.

“Gas marketers know very well that customers are spooked by natural-gas prices,” said Tom Adams, executive director of Energy Probe, a non-profit environmental and consumer advocate.

Mr. Adams said the contracts are offering natural gas at higher rates than daily market prices.

 

The federal government deregulated the natural-gas industry in 1985. In Ontario, gas marketers must be licensed by the Ontario Energy Board.

The aggressive marketing among homeowners is a new phenomenon.

For the first time, Enbridge Home Services is sending 60 salespeople out on a door-to-door campaign throughout the summer. If the campaign, which starts on Tuesday, goes well, the company plans to expand to areas such as Niagara.

“We are offering the customer an alternative,” said Glenn Hills, a vice-president at Enbridge.

The company is offering customers a fixed price for one-, three- and five-year fixed rates. For example, customers are being offered a rate of 28.2 cents per cubic metre for three years.

Customers are not locked in, said Mr. Hills. If natural-gas prices change dramatically during that time, they can pay a penalty and get out fo their contract.

At Enbridge, natural-gas prices have soared 56 per cent since last June, translating into an increase of $672 on the average home-heating bill.

Over at Toronto Hydro Energy Services, a promotional campaign was launched in late March and will run until the end of May offering customers fixed rates on both natural gas and electricity in preparation for the opening of the electricity market. The current mail campaign follows an earlier push to get customers to sign long-term contracts for electricity.

“We do not knock on doors. So far we have preferred not to go door-to-door,” said Lorna Francis, vice-president of marketing for Toronto Hydro Energy Services.

Aside from the aggressive marketing, customers have to wade through material outlining price variations between companies not only on natural gas but on delivery fees and additional charges.

While homeowners who locked into long-term fixed rates for natural gas in the late 1990s, when prices were low, saved money, Mr. Adams doesn’t advocate the same approach today.

 

This entry was posted in Natural Gas Utility Regulation and Commodity Deregulation. Bookmark the permalink.

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