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Contracting with Natural Gas Marketers and Electricity Retailers:

Consumer protection rules you should know

• Fair Marketing Practices
• Contract Reaffirmation
• When Reaffirmation Is Not Required
• Renewals and Extensions
• Renewals and Extensions for One Year or Less
• Renewals and Extensions for More Than One Year
• Information Required in Contracts
• More information

 

Natural gas and electricity are delivered to your home by your utility. This delivery service is always provided by your utility at rates approved by the Ontario Energy Board.

However, as a low-volume consumer you can choose how you buy the energy itself. You can choose to do nothing, in which case you will automatically purchase the natural gas or electricity from your utility. Or you can choose to enter into a contract with a natural gas marketer or an electricity retailer. The best choice for you will depend on your individual needs and preferences. In making your decision, you may wish to check out other helpful information on the Ontario Energy Board’s Web site, under the heading “For Consumers”.

Natural gas marketers and electricity retailers are licensed by the Ontario Energy Board. We also regulate their sales activities related to low-volume consumers (consumers like you who use less than 50,000 cubic meters of natural gas or 150,000 kilowatt hours of electricity a year). We have prepared this fact sheet to help you understand some of your rights and obligations when you are considering contracting with a natural gas marketer or an electricity retailer.

This factsheet summarizes the consumer protection rules that are set or enforced by the Ontario Energy Board and that apply to low-volume consumers. However, there are other laws that also contain consumer protection rules related to the purchase of natural gas and electricity from a marketer or retailer. These laws are not discussed in this fact sheet, but you should carefully consider all relevant laws to ensure that you understand all of your rights and obligations (i.e., Consumer Protection Act, 2002) .

 

Fair Marketing Practices

Natural gas marketers, electricity retailers and their salespersons must conduct their businesses using “fair marketing practices”. To comply with fair marketing practice requirements, a marketer or retailer must, among other things:

1. Immediately and truthfully provide you with its name and the name of its salesperson;

2. State that it is not your utility. Although a marketer or retailer may be an affiliate of your utility, it is required by law to be a separate company. It is also prohibited from gaining any special advantage because of any affiliation with a utility;

3. State the term of the contract and the price to be paid under the contract, expressed per cubic meter of natural gas or per kilowatt hour of electricity;

4. Not exert undue pressure on you;

5. Allow you sufficient time to read all documents provided to you;

6. Not make any statement or provide any information that is false or likely to mislead you, or that is inconsistent with the terms of the contract being offered;

7. Not make any false, misleading or deceptive statements about:

• the terms and conditions of the contract;
• the amount of money you would save if you chose one marketer or retailer over your utility or any other marketer or retailer;
• the distribution or delivery charges or the total price of electricity or natural gas;
• the difference between the price of electricity or natural gas that the marketer or retailer is offering and the price being offered by your utility or any other marketer or retailer;
• the period of time within which you may enter into a contract at a specified price;
• any relationship or connection between the marketer or retailer and any other person or company; or
• the consequences if you do not enter into a contract;

8. Not make any false, misleading or deceptive statements in any advertisements or other published materials; and

9. Not offer a contract that has a term of more than five years.

A marketer or retailer must provide you with a written copy of the contract within 40 days of the date on which you signed it. In most instances, a copy is left with you at the door. If you are not sent a copy of the contract within this period, the contract ceases to have effect on the 41st day after the date on which you signed it. You then have no obligations under the contract as of that date, and you cannot be required to pay any cancellation fees or penalties.

In addition, where a contract is negotiated at your home or office, the marketer’s or retailer’s salesperson must:

• provide you with a copy of any paperwork that you signed;

• provide you with a copy of any paperwork that you were shown, if you request a copy; and

• provide you with a business card that identifies the salesperson and the name and phone number of the retailer or marketer.

Finally, in the case of a contract for electricity, the electricity retailer must tell you the price you will pay under the contract, as well as the price that you would pay if you purchased electricity from your utility under the Regulated Price Plan.

 

Contract Reaffirmation

Once you sign a contract for the purchase of natural gas or electricity, as a general rule it will not remain in effect unless you confirm that you wish to accept the contract. This process is called “contract reaffirmation”, and it applies in all but a few circumstances (see “When Reaffirmation Is Not Required”, below).

The rules that apply to contract reaffirmation are as follows:

1. Starting on the 10th day after you have received a written copy of the contract, the marketer or retailer is permitted to contact you to ask you to reaffirm your acceptance of the contract.

2. At that point you may choose to reaffirm your acceptance of the contract, or you may choose not to do so. If you notify the marketer or retailer that you do not wish to reaffirm the contract, you cannot be required to pay any cancellation fees or penalties.

3. If you do not reaffirm the contract by the 61st day after you received a written copy, the contract will no longer be in effect as of that date. Again, you will then have no obligations under the contract as of that date, and you cannot be required to pay any cancellation fees or penalties.

4. If you reaffirm the contract and then decide at a later date to cancel it, you may have to pay a cancellation fee. The cancellation fee or the method by which it will be calculated must be stated in your contract.

Typically, the marketer or retailer will phone you to ask you to reaffirm your acceptance of the contract. If you reaffirm by phone, the marketer or retailer must record the phone call, and the recording must be given to you if you request it. You also have the option of reaffirming or refusing to reaffirm by giving written notice to the marketer or retailer.

 

When Reaffirmation Is Not Required

There are three situations in which your reaffirmation is not required:

• if you contact the natural gas marketer or electricity retailer more than 30 days after the marketer or retailer initially contacted you, and ask to be signed up to a contract; or
• if you entered into a contract via the internet; or
• if you responded to the marketer’s or retailer’s direct-mail campaign.

 

Renewal and Extension of Contracts

In order for a natural gas or electricity contract to be renewed or extended, the original contract must contain a provision that allows for the renewal or extension. If your contract contains such a provision, it can be renewed or extended following the rules described below. Please note, however, that the natural gas marketer or electricity retailer cannot change any terms or conditions of the contract at the same time as the renewal other than those that relate to the duration of the contract and the price payable for the natural gas or electricity.

The rules for renewing or extending a contract differ, depending on whether it is an electricity or natural gas contract and the duration of the renewal or extension.

• Natural gas renewals or extensions for one year or less are treated in one way, and renewals or extensions for a longer period of time are treated in another way.
• Electricity contracts must state the price the consumer will pay if the contract is renewed and also, the price the consumer would pay if they purchased from the utility. The contract cannot be renewed or extended unless the consumer provides express consent that he has read this price comparison. For this reason electricity contracts cannot be automatically renewed.

 

Renewals and Extensions for One Year or Less

The process for renewing or extending a contract for one year or less is as follows:

1. A notice must be sent to you between 60 and 120 days before the date that your contract ends, also known as the “renewal or extension date”.
   
   
2. This notice must include:
   
   
   • A copy of the original contract;
   • Any changes made to the original contract;
   • A cancellation form;
   • The renewal or extension date and the options available to you. One of the options must be that you can cancel the contract when the term ends;
   • A statement that confirms that the contract will be renewed or extended unless you send a written cancellation request within 30 days after you receive the notice; and
   • A statement that confirms that you may also cancel the contract within 35 days after the first bill under the renewed or extended contract is sent. However, it may require up to two billing periods before this cancellation takes effect. Also, you may not be reimbursed for any higher price that you may have paid during that time compared to the price that you would have paid if you had purchased the natural gas or electricity from your utility.
     
     
3. For electricity contracts, the renewal or extension notices are also required to state the price you will pay if the contract is renewed or extended, and the price you would pay if you purchased electricity from your utility. The contract cannot be renewed or extended unless the retailer receives your express consent that you have read this price-comparison information.
   
   
4. For natural gas contract renewals or extensions, different rules apply depending on how and when you entered into the contract.
   
   
   • In cases where the original contract was entered into over the internet or by phone, or where the customer responded to a direct mail campaign, contracts may be automatically renewed for up to one year with a change in price, provided the contract has a renewal / extension provision.
   • If you signed a contract in person with a marketer’s agent on or before July 30, 2005, and if you do not give written notice to cancel, the contract can automatically be renewed or extended for up to one year at the price described in the renewal or extension notice.
   • Any new contracts signed in person with a marketer’s agent after July 30, 2005 cannot be automatically renewed. You would need to give your explicit consent.

 

Renewals and Extensions for More Than One Year

The process for renewing or extending a contract for more than one year, up to five years, is as follows:

1. A notice must be sent to you between 60 and 120 days before the date that your original contract ends, also known as the “renewal or extension date”.
   
   
2. This notice must include:
   
   
   • a copy of the original contract;
   • any changes made to the original contract; and
   • a renewal or extension form.
     
     
3. In order for the contract to be renewed or extended, you must confirm in writing with the marketer or retailer that you accept the renewed or extended contract. This confirmation may take different forms. For example, if you endorse and cash a cheque from the marketer or retailer that represents a renewal or extension bonus or rebate, the marketer or retailer may consider that action to be your written confirmation. Be sure to carefully read all of the material provided to you before you take any action.
   
   
4. Even after you accept the renewal or extension, you have up to 14 days after you have confirmed your acceptance to change your mind and cancel the renewed or extended contract. In that case, you must give written notice of cancellation to the marketer or retailer within the 14 days.
   
   
5. Electricity contract renewals or extensions for more than one year, up to five years, are subject to additional special requirements. Specifically, the renewal or extension notice must state the price you will pay if the contract is renewed or extended, and the price you would pay if you purchased electricity from your utility. The contract cannot be renewed or extended unless the retailer receives your express consent that you have read this price-comparison information.

 

Information Required in Contracts

Electricity and natural gas contracts must contain certain information. If any of this mandatory information is missing, you have the right to cancel the contract within one year of signing.

Some of the more important mandatory information you should look for in a natural gas or electricity contract are as follows:

• your name and address;
• the natural gas marketer’s or electricity retailer’s name, business address and telephone number, as well as any fax number, website address, e-mail address or toll-free number;
• the date on which you signed the contract;
• your signature and the name and signature of the marketer’s or retailer’s representative (“electronic signatures” like a recorded phone call or internet agreement as also acceptable.);
• the price that you will be charged under the contract and, in the case of an electricity contract, the price that you would be charged if you purchased the electricity from your utility;
• the length of time the contract will be in effect;
• the intended start date for the supply of natural gas or electricity under the contract, as well as a description of any circumstances that may delay that start date;
• the terms of payment, including the type and frequency of bills, and any deposit, late payment charges and other charges or penalties payable under the contract;
• a statement that you are contracting with a marketer or retailer and not with your utility;
• an explanation of how and when the contract may be cancelled by you or the marketer or retailer, as well as the address or fax number to which you may send a cancellation notice;
• a statement indicating whether or not the contract applies only to specified premises, and any terms or conditions related to making the contract applicable to other premises;
• a description of how to make a complaint to or ask a question of the marketer or retailer, as well as instructions on how to contact the Ontario Energy Board’s Consumer Relations Centre;
• a statement that the price is for the natural gas or electricity commodity only and does not include regulated transmission, distribution and other charges that will be charged by your utility;
• the number of the licence issued to the marketer or retailer by the Ontario Energy Board;
• a statement indicating whether or not the contract may be assigned (sold or transferred) by the marketer or retailer to another party, and any terms or conditions relating to such assignment; and
• in the case of an electricity contract that contains a provision under which you agree to give up a rebate to which you may be entitled by assigning it to another party (usually the electricity retailer), a statement informing you that you will not receive the rebate. (In the past some customers received a Business Protection Plan Rebate. This was paid to those consumers who did not qualify for the Government legislated Price Protection. Many retailer contracts contained a provision under which the customer assigned the amount of this rebate to the electricity retailer.)

 

More Information

We want to ensure that consumers make informed decisions and hope that you have found this fact sheet helpful.

For more information about natural gas marketing, electricity retailing and your rights and obligations as a low-volume consumer when contracting with marketers and retailers (including relevant provisions of Codes of Conduct issued by the Ontario Energy Board), please visit our website at www.oeb.gov.on.ca, or call us at:

Toll-free: 1-877-632-2727
In Toronto: 416-314-2455

This factsheet contains a summary and general discussion of certain legal instruments and related rights and obligations, and is not intended as legal advice. The complete text of the Ontario Energy Board Act, 1998, its regulations and other consumer protection legislation can be found at www.e-laws.gov.on.ca.

The Ministry of Government and Consumer Services, which is responsible for other consumer protection legislation, can be contacted through its Web site at www.mgs.gov.on.ca.

The Ontario Energy Board is the regulator of the natural gas and electricity sectors in Ontario.

 

This information is provided as a public service. Although we endeavor to ensure that the information is as current and
accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy of the information.
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This page last updated on 2008-01-10
Copyright information: Queens Printer for Ontario, 2008