Ontario Energy Board Adopts Final Pricing Disclosures, Comparisons; Verification Scripts

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November 18, 2010

The Ontario Energy Board has adopted, effective January 1, 2011, a restated Electricity Retailer Code of Conduct, a restated Code of Conduct for Gas Marketers, and an amendment to the Gas Distribution Access Rul (Attachment C), to implement the Energy Consumer Protection Act, 2010 (EB-2010-0245).

Additionally, the Board issued the following to be used by electric and gas retailers:

• Disclosure statements
• Price comparison templates
• Scripts for contract verification calls (redline)
• Scripts for contract renewal/extension calls (redline)

There are numerous disclosure statements and price comparison templates based on customer type, commodity, and distribution territory.  Such documents can be accessed here.

Notable new requirements include a required comparison that the supplier must provide to the default service rate, and various new disclosure and verification requirements.

The revised codes and templates largely follow the Board's October proposals with several changes.  No material changes were made to the earlier drafts of Supplier Codes or the proposed amendment to the Gas Distribution Access Rule as set out in the October Proposed Amendments.

The Board denied several changes requested by suppliers.  Among these is that the Board will not allow the disclosure statement and price comparison templates to be provided in black and white, as the color design of the statement and templates, "provides better readability and allows for certain information to be emphasized for the consumer."

The Board also declined to develop a "multiple locations" verification script at this time, but may consider the proposal in the future.  The Board said that allowing multiple locations on a single verification script may be confusing to the customer, and cited situations where the customer may only be authorized to enroll certain locations with a marketer.

A stakeholder representing low-volume consumers had suggested that the price comparison presentation used by a particular supplier be subject to review by the Board.  "The Board does not believe that it is necessary to require suppliers to submit their price comparison presentations for prior review or approval by the Board.  If it appears that a supplier's price comparison presentation may be misleading or otherwise non-compliant, the Board will take such remedial action as may be warranted at the relevant time," the Board said.

The Board has made changes to the price comparison templates to account for the bundling of gas supply, transportation and storage.  A group of suppliers had jointly commented that the different versions of the templates for gas supply, transportation and storage should be consolidated, and that marketers should be allowed to indicate the combination applicable to the specific offer being made to the consumer.

"The Board sees merit in this proposal, both for simplicity and for ease of comparison by consumers.  The Board is therefore replacing these different versions of the price comparison templates with one version for each of residential and non-residential consumers that addresses supply, transportation and storage on the same template.  It is necessary to have different versions of these consolidated templates for different gas utilities, as not all utilities offer unbundled rates for transportation and/or storage.  Consequential changes have also been made to the instructions, to indicate how the supplier is to identify whether charges for transportation and/or storage are included in the contract price or will continue to be paid at the utility price," the Board said.

Additionally, the Board said that, for price comparison purposes, "it is appropriate to treat variable transportation and storage costs in much the same manner as market-based supply costs."  The Board has therefore revised the instructions for the gas versions of the price comparison templates to require the supplier to include, in addition to the price prevailing at the time of the contract offer, a description of how the variable price is derived and the basis on which changes to the variable price will be determined during the contract term.

The Board has not modified the requirement that for a supplier's rate which varies with the market, the supplier must provide a price comparison to the utility based on a six-month forecast of the supplier's variable rate.  Suppliers had said that such a comparison based on a six-month forecast of a variable rate is impractical and misleading, and should not be necessary with the inclusion of the qualifying description of the market price in the price comparison form.  

"While the Board understands that meaningful forecasts of market prices may not be available for the entire duration of a contract, in the Board's view a rate based on a 6-month forecast can reasonably be expected to be more representative of the cost to the consumer than the market rate on any given day.  The Board is therefore not persuaded that it should change its approach to this element of contract price disclosure."

Regarding agent training, the Board confirmed that the effect of a limitation on the re-taking of training tests is that the supplier cannot offer further training or testing for a person that has failed to pass that supplier's training test twice.

   
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