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Ontario Hydro joins sales rush

Toronto Star - May 19, 2001
by John Spears — Business Reporter


A company owned by the Ontario government has joined the rush to sell electricity to Toronto homeowners and tenants.

But one resident says the provincially owned firm is using inappropriate pressure to sign up customers.

Ontario Hydro Energy Inc. is knocking on doors in the city, pitching one-, three- and five-year electricity deals. It is a unit of Hydro One, which is owned by the province and runs Ontario's main electric-transmission grid.

Bob Levitt, a tenant who pays his own electricity bills, said an Ontario Hydro Energy representative knocked on his apartment door and offered to sell him electricity.

Levitt said the sales rep introduced himself with: ``I'm from Hydro. Can I see your bill?''

He says the rep assured him: ``We're authorized to get a copy of your Toronto Hydro bill.''

Mike Miller, president of Ontario Hydro Energy, said it is using commission sales agents who are not employees, but they are not trained to approach customers the way Levitt says the rep did.

``I'd be surprised if that was the case, although I don't want to argue with your reader.''

Levitt said the sales rep showed him a contract offering power for one, three or five years. The box for the five-year plan was already ticked off.

He said the sales rep tried to get him to sign on the spot, and only reluctantly left the sales contract with him to read over.

Miller said his firm has just started testing the market in Toronto.

Until now, it has been signing up customers mainly in rural areas - where its parent firm delivers direct to customers or has bought dozens of local utilities. It has also moved into Mississauga and Oakville.

``Recently we have started to try to market a little bit in Toronto, kind of feeling our way,'' Miller said. ``So far it's been pretty positive.''

Toronto Hydro's retail unit has been signing up customers outside the city using mailings instead of a sales force.

Toronto is the biggest market in the province, with 656,962 electricity customers, 578,328 of them residential.

For the moment, the battle to sign up customers is something of a phony war. Ontario's competitive electricity market may not arrive for another year. Until it opens, residential customers will continue to buy from their local utility.

Miller said his company isn't trying to push customers toward longer-term contracts, though he has advised his mother to take a five-year contract.

Sales reps have to make it clear they are not from the local hydro company, he said, adding that his company conducts follow-up interviews to see if sales reps are following instructions. After signing a deal, there's a 10-day cooling off period. After that, there's a penalty for breaking the agreement.

The penalty consists of 10 per cent of the consumer's average monthly bill, multiplied by the number of months left in the contract. For instance, if you used $120 of electricity a month on average, and had 20 months left in the contract, you'd have to pay 10 per cent of $120, or $12, times 20, for a total of $240 to break it.


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