CBC News Online
November 19, 2001
TORONTO – The price of natural gas is falling but some consumers have found themselves in a bind: they’re still paying sky-high prices.
Most of these people locked themselves into a contract after last year’s soaring energy prices.
Rose and Joe Balsamo decided to protect themselves early this year.
“The newspapers were full of stories…; horror stories, rates were going to increase,” says Rose.
To head off any more price boosts, Rose signed up online to buy natural gas at one price for a fixed term: 26-cents per cubic meter for five years. She now says she regrets that decision.
It used to be you had only one utility to purchase from, but with many provinces opting to deregulate their industries, buying gas is much like buying a mortgage.
There are different retailers offering a variety of packages.
Gas marketers going door to door have encouraged nearly half of Ontario’s gas customers to switch to a fixed deal, and that’s not always the best advice.
“The gas market works like the mortgage market. If you can withstand the volatility your best advice is to stay floating rather than go with the fixed price,” says Tom Adams of Energy Probe.
Even consumers who lived in regulated areas will find their bills high right now. Some utilities lost out last year when the price went up and they are still recovering those costs retroactively from consumers.
Prices this winter are expected to keep going down. Analysts say the weak economy and strong gas reserves will be a boon for those who didn’t sign for fixed rates.
The Balsamos are stuck now. They face a $425 penalty if they break their contract.
“In hindsight, I’d tell people, ‘don’t panic, wait it out, think it over and know what you’re signing,'” says Rose.