Mayor trashes Direct Energy

After the presentation of the latest annual report of PUC Inc. last night, Sault Mayor John Rowswell had a few things to say about providers of electricity and natural gas in competitive markets.

"You won't get a better deal, in my eyes as mayor of the City of Sault Ste. Marie... than with our public utilities," Rowswell said.

The mayor then related his own experience with Direct Energy Marketing Limited.

Rowswell said that, about six years ago, he apparently either signed or agreed to enter into a residential natural gas contract with the Toronto-based energy supplier, although he insists he doesn't remember actually signing anything.

Rowswell's experience was with the division of the company that provides natural gas.

But he says it's very similar to the Direct Energy division that supplies electricity.

"It's very easy to sign it and I can tell you, you will have grief beyond your years," the mayor said. "I had a heck of a time getting out of this contract. Seniors would just say 'forget it' and pay it."

Rowswell estimates that his family paid at least $800 more than it needed to for the natural gas it bought through Direct Energy during his contract with the company.

The mayor said he didn't realize the company had a default clause in its contracts that states any person who doesn't cancel the contract is automatically signed up for another year - at the highest rate offered by Direct Energy.

"I assumed that, if you don't renew with them, you're finished with them," Rowswell said. "But the issue here is that it's not just me. It's very easy to catch someone who's uninformed about this."

Rowswell recommended that you call Union Gas or PUC Inc. whenever someone comes knocking at your door, trying to sign you up for a contract to buy natural gas or electricity.

"Frankly we're indifferent to whether or not people sign a contract or not because we get the same rate regardless," said PUC President and CEO Brian Curran. "But we do know there's a premium for those contracts and in some cases it's quite significant."

Curran said that those premiums are just too much for some people to pay and they find themselves dealing with a collection agency or other non-payment measures because of them.

"It falls back on our shoulders because we're the ones who end up having to deal with them if they can't pay," Curran said.

The mayor recommended that Saultites find the information insert sent out with their May PUC bills and keep it in an easily accessible place.

PUC Inc. is wholly owned by the City of Sault Ste. Marie.

Direct Energy Marketing Limited is North America's largest energy retailer, offering products and services in all 10 Canadian provinces and 20 U.S. states.

In 2003, Direct Energy was fined $157,500 for 21 contracts forged in 2001 and 2002.