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Ontario Energy Board Intends to Suspend Sales Activities of Four Retail Suppliers
August 26, 2011
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The Ontario Energy Board intends to suspend some or all of the sales channels used by the following suppliers until compliance with applicable customer protection regulations can be demonstrated: morEnergy Savings Corp. and Blue Power Distributed Energy Corp; Energhx Green Energy Corporation; Ag Energy Co-operative Ltd.; and Active Energy Inc.
The Board also intends to fine each supplier for the alleged violations described below (all figures in Canadian $). Each supplier may request a hearing on the allegations.
morEnergy Savings Corp. and Blue Power Distributed Energy Corp.
The Board intends to impose an administrative penalty of $45,000 against morEnergy Savings Corp. and Blue Power Distributed Energy Corp. (collectively, morEnergy), alleging non-compliance with 38 provisions of the customer protection regulations.
Additionally, the Board is also seeking an order suspending morEnergy's new door-to-door sales activities.
The suspension is to remain in effect until morEnergy can satisfy the Board that the alleged issues of non-compliance have been remedied or morEnergy confirms with the Board that it is no longer engaged in the activities using door-to-door sales.
Among other things, the Board alleged that:
- morEnergy's standard form Identification Badge issued to all salespersons who meet in person with low-volume consumers fails to state that the salesperson is (a) not associated with any electricity or gas distributor or government contrary to section 6 of Ontario Regulation 90/99; and (b) not a representative of the consumer's electricity or gas distributor and is not associated with the Ontario Energy Board
- morEnergy's contract including the terms and conditions are in a font size of less than 12; contrary to section 12 of the ECPA and section 7(1) of Ontario Regulation 389/10.
- morEnergy's contract states the consumer can cancel the contract within 10 days after they receive a written copy of the agreement but the contract fails to state that the contract can be canceled without cost or penalty during this 10 day period; contrary to section 7(1)8 of Ontario Regulation 389/10.
- morEnergy's contract contains incorrect information regarding the calculation of a cancellation fee payable under the contract for gas and electricity as it states a cancellation fee will be based on historical consumption patterns to project future usage. The Board alleged that this is not in accordance with section 23(1)1 and 23(1)2 of Ontario Regulation 389/10 which specifies a cancellation fee payable of not more than $100 for gas and $50 for electricity for each year, or part year, remaining on the contract.
- morEnergy's contract fails to include the applicable circumstances prescribed in section 21(b) & (e) of Ontario Regulation 389/10 which provide that the consumer can cancel the contract without cost or penalty; contrary to section 7(1)13 of Ontario Regulation 389/10.
- morEnergy deviated from the applicable Board-approved script
- In one of the 25 positive electricity verification calls conducted by morEnergy reviewed by OEB, the verification representative failed to end the verification process when advised by the consumer of an act or omission that appeared to be an unfair practice.
Energhx Green Energy Corporation
The Board intends to impose an administrative penalty of $32,500 against Energhx Green Energy Corporation, alleging non-compliance with 30 provisions of the customer protection regulations.
Additionally, the Board also intends to make an order suspending Energhx's activities with respect to sales, renewals, extensions or amendments of contracts using the following sales channels: Door-to-Door; Exhibitions, Trade Shows and Direct Mail.
The suspension will remain in effect until Energhx can satisfy the Board that the alleged issues of non-compliance have been remedied or Energhx confirms it is no longer engaged in these activities using the above-mentioned sales channels.
Among other things, the Board alleged that:
- Energhx's ID badge does not state that the salesperson is (a) not associated with any electricity or gas distributor or government, contrary to section 6 of Ontario Regulation 90/99; and (b) not a representative of the consumer's electricity or gas distributor and is not associated with the Ontario Energy Board or the Government of Ontario.
- Energhx's contract fails to include a statement that if the consumer cancels the contract within the 10-day period, the consumer is entitled to a full refund of all amounts paid under the contract; contrary to section 12 of the ECPA and section 7(1)9 of Ontario Regulation 389/10.
- Energhx's verification representative did confirm the consumer's name but did not confirm if she was speaking to the account holder or the account holder's agent
- Energhx lacked adequate training materials and testing
- Energhx confirmed with the OEB inspector that it requires a salesperson or verification representative to achieve a minimum 75% pass mark on the training test; contrary to section 5.6(c) of the Codes which requires a pass mark of 80%.
- In one case reviewed, the prospective salesperson attempted the test twice but scored 70% each time however, the individual was considered to have passed the test; contrary to section 5.6(c) and (d) of the Codes.
Ag Energy Co-operative Ltd.
The Board intends to impose an administrative penalty of $27,500 against Ag Energy Co-operative Ltd., alleging non-compliance with 30 provisions of the customer protection regulations.
Additionally, the Board is seeking an order suspending Ag Energy's new sales, renewals, extensions, or amendments of contracts activities using the following sales channels: Exhibitions, Trade Shows, Direct Mail, Ag Energy's Place of Business and Telephone Renewals.
The suspension is to remain in effect until Ag Energy can satisfy the Board that the alleged issues of non-compliance have been remedied or Ag Energy confirms with the Board that it is no longer engaged in the activities using the identified sales channels.
Among other things, the Board alleged that:
- Ag Energy's standard form Identification Badge issued to all salespersons who meet in person with low-volume consumers fails to state that the salesperson is (a) not associated with any electricity or gas distributor or government contrary to section 6 of Ontario Regulation 90/99; and (b) not a representative of the consumer's electricity or gas distributor and is not associated with the Ontario Energy Board or the Government of Ontario, contrary to section 2.4(a) of the Codes.
- Ag Energy's contract terms and conditions are in a font size of less than 12; contrary to section 12 of the ECPA and section 7(1) of Ontario Regulation 389/10.
- Ag Energy's contract fails to state that the consumer has the right under the Act to cancel the contract without cost or penalty up to 10 days after the consumer acknowledges receipt or is deemed to acknowledge receipt of a text-based copy of the contract; contrary to section 12 of the ECPA and section 7(1)8 of Ontario Regulation 389/10.
- Ag Energy's contract fails to state that if the consumer cancels the contract within that 10- day period, the consumer is entitled to a full refund of all amounts paid under the contract; contrary to section 12 of the ECPA and section 7(1)9 of Ontario Regulation 389/10.
- Ag Energy's electricity contract fails to state that the consumer may cancel the contract without cost or penalty up to 30 days after receiving the first bill under the contract;
- Ag Energy's electricity contract allows for the automatic renewal of a contract; contrary to section 12 of the ECPA and section 7(2)(a) of Ontario Regulation 389/10
Active Energy Inc.
The Board intends to impose an administrative penalty of $25,000 against Active Energy Inc., alleging non-compliance with 18 provisions of the customer protection regulations.
The Board is also seeking an Order suspending Active's new sales, renewals, extensions or amendments of contracts activities using the following sales channels: Door-to-Door, Exhibitions, Trade Shows, Direct Mail, Active's Place of Business and Telephone Renewals.
The suspension is to remain in effect until Active can satisfy the Board that the issues of alleged non-compliance have been remedied or Active confirms with the Board that it is no longer engaged in the activities using the identified sales channels.
Among other things, the Board alleged that:
- Active Energy's contract fails to include the applicable conditions/rights under section 21(b), (e) and (f) of Ontario Regulation 389/10 which provide that the consumer can cancel the contract without cost or penalty; contrary to section 12 of the ECPA and section 7(1)13 of Ontario Regulation 389/10.
- Active Energy's gas contract states that in relation to a renewed contract, the consumer has the ability to cancel the contract within 35 days of the consumer receiving his or her first bill under the renewed contract, rather than giving the consumer the ability to cancel at any point after the contract is renewed; contrary to section 7(2)(a) of Ontario Regulation 389/10 and section 12 of the ECPA.
- It was observed that in one contract, the rate of 34.9 cents per cubic meter included under Part B of the price comparison does not match the rate of 31.9 cents per cubic meter stated in the consumer's contract; contrary to section 8(3) of Ontario Regulation 389/10, section 12 of the ECPA and section 4.6(b) of the Marketer Code.
- In one observed verification call, Active Energy skipped the following steps of the Board-approved script: 3 to 14 and 20 to 23; contrary to section 15 of the ECPA, section 13(2) of Ontario Regulation 389/10, and section 4.10 and 4.11(a) of the Marketer Code.
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