Direct Energy, NDP leader clash over quotes

Paul Vieira
Financial Post
April 5, 2002

Photo credit: Carlo Allegri
HOWARD HAMPTON: “An apology from Direct Energy would be nice.”

Sales agents from Direct Energy Marketing Ltd., one of many firms aiming to capitalize on electricity deregulation in Ontario, are using quotes from Howard Hampton – one of deregulation’s fiercest opponents — to lure new customers.

“I want these unscrupulous companies to stop using my name to rip off consumers,” Mr. Hampton, leader of Ontario’s New Democratic Party, said yesterday. “And an apology from Direct Energy would be nice.”

But one industry observer who has debated Mr. Hampton on the issue was less sympathetic.

“He’s been hung out to dry on his own demagoguery,” said Tom Adams, executive director of industry watchdog Energy Probe, adding he believes the sales agents did nothing wrong in using Mr. Hampton’s statements. “It’s pretty precious.”

Mr. Hampton said Direct Energy representatives in Toronto and Sudbury, Ont., are going door to door with copies of newspaper articles in which he’s quoted predicting that hydro rates in Ontario will skyrocket if the province opens its $10-billion electricity market to competition, as planned, on May 1.

“Obviously, without [electricity deregulation], there would be no door-to-door marketers and consumers would not have to deal with their aggressive and often misleading tactics,” Mr. Hampton wrote in a letter to Direct Energy.

He added: “As long as consumers are to be subjected to these sales techniques, I request your assurances that the name Howard Hampton will not be used in any way to coerce new customers into signing with Direct Energy.”

A Direct Energy spokesman said it has received the letter and will respond to it as soon as possible.

The firm’s pitch is that it can provide customers with power over a certain period of time, such as three to five years, at a fixed price – thereby avoiding wild swings in electricity prices.

However, the firm has run into trouble over the sales tactics of some of its agents, who have in certain cases misrepresented who they are and the price they are offering. Agents have also been found to be forging signatures on contracts.

Mr. Hampton has been travelling across the province to talk about the pitfalls of opening Ontario’s power market. He has cited the debacles in California and Alberta, where rates skyrocketed, and predicted the same will happen in Ontario. One of his claims is that Ontarians will have to pay U.S. prices for its electricity.

However, Mr. Adams said prices for electricity in neighbouring U.S. jurisdictions are at or below Ontario prices. “I have tried to correct him several times, but he goes on. Now, he has been caught in his own trap.”

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