DIRECT ENERGY MARKETING Ltd - Gas marketer's customer wins his release

Gas Marketer's Customer Wins His Release


April 28, 2000 - Toronto Star - by Ellen Roseman - IT TOOK TWO years, but Dieter Potschka has broken his five-year contract with Direct Energy Marketing Ltd. And even if he pays more for home heating, he's thrilled toget out of a deal his daughter signed on his behalf. Potschka's story sheds light on the door-to-door sales tactics used by some natural gas marketers. Direct Energy insisted Potschka had a valid contract and agreed to release him only when I called this week.

"We're not harmed by this, but we think he'll rue his decision," said Jeremy Slasor, the company's marketing director.

Potschka, a purchasing manager at a steel company, says he knows what a proper contract is and doesn't want to deal with a gas marketer he didn't freely choose.

In August, 1996, Potschka's daughter, then 22, was visiting his home in King City, an upscale neighbourhood north of Toronto. "She was persuaded to sign a contract and asked to give the person at the door a copy of my account number with Consumers Gas. This is confidential information," her father wrote to the Ontario Energy Board last month. Direct Energy agrees an adult daughter does not have the right to sign a five-year gas deal on her father's behalf.

The issue in dispute is whether Potschka should have cashed a $15 cheque sent to him in late 1997, as a rebate after his first year. Didn't he read the message on the back? It said: "By cashing this cheque, I acknowledge that I have read the attached and have elected to participate with Direct Energy Price Protection Program. My cost of natural gas will be 10.1 cents per cubic metre for a five-year period." Potschka says he didn't understand that cashing the cheque meant signing a contract agreeing to the terms of the letter. "Why wasn't a signature required on the letter?" he asks."That is what I would deem a contract." The misunderstanding might have been resolved if not forPotschka's tactical error.

Writing to the Ontario Energy Board, he accused Direct Energy of insults and abuse, harsh language that hurt his case. "I have no problem cancelling the contract," Slasor told me,"but if I let him off, it looks like I'm admitting to all that - and I'm not." Potschka also said he would have done as well if he'd stayed with Enbridge Consumers Gas.

While Direct Energy's unregulatedrate of 10.1 cents a cubic metre is lower than Enbridge's regulated 12.2 cents, extra charges bring Direct close to the same level. Some of these charges are temporary, Slasor replies. Meanwhile, Enbridge is asking the Ontario Energy Board for a retroactive rate increase because of higher than expected commodity prices. To show how much prices have gone up, Direct Energy now charges 18.5 cents for a five-year gas supply, as does Ontario Energy Savings Corp. Apollo Gas charges 16.9 cents and Sears Canada 15.5 cents. Some marketers don't even offer fixed prices for five years. Sunoco Inc. charges 15.4 cents for three years and Enbridge Home Services, the utility's unregulated affiliate, charges 14.9 cents for either one or two years. (You can get updated prices from www.energyshop.com, a useful Web site that should be your first stop if you're consideringc hanging gas suppliers.)

Direct Energy is now licensed to sell electricity as well. It was the first retailer to get the nod on April 1. Since then,the Ontario Energy Board has approved six more: GreengridElectric Ltd., Greenwin Property Management Inc., Northern Ontario Energy Inc., Pure Choice Electric Inc., Toronto Hydro Energy Services Inc. and Trans Canada Energy Ltd. When Direct Energy starts knocking on doors to sell electricity later this spring, sales reps will have two-way pagers that instigate quick callbacks to people who sign long-term deals. "We'll make sure the customer understands it and wants to do it. Any wrong answer and the deal is cancelled," Slasor promises.

Anne Powell, the energy board's director of licensing, thinks Direct Energy's callbacks will help customers such as Potschkaand reduce confusion. The board has a strict conduct code for energy retailers and sends complaints to an independent dispute resolution firm in Ottawa. "Marketers and retailers must pay for this service," says Powell. "Those causing problems will be paying quite a bit."

Ellen Roseman's column appears Monday, Wednesday, Friday and Sunday. You can reach her by writing Your Business c/o TheT oronto Star, 1 Yonge St. Toronto M5E 1E6, by phone at (416)945-8687, by fax at (416) 865-3630 or at erosema @ thestar.ca bye-mail.