Jenny Chen is afraid of the furnace in her parents’ house.
It’s not a safety issue she’s concerned about. It’s how much money it will burn through when she fires it up during the coming cold fall and winter weather which has her worried.
Chen said she felt duped into paying a much higher than market rate for natural gas after signing a contract with an independent gas marketing company she claims had promised her cost would be lower than with FortisBC.
Chen said she was keen to save money because she, her husband and four-year-old son rent space in her parents’ home because they cannot afford to by their own place yet. So, when a sales representative from Summit Energy BC LP came to the front door at the end of June, she listened to the pitch and thought it would be a good deal to sign up for a five-year, fixed-rate term.
Chen based her decision on her parents’ then current FortisBC gas bill she said the sales agent from Summit Energy asked to look at. He then used it to calculate the natural gas charge which he allegedly said amounted to $7.86 a gigajoule.
The rep from Summit Energy assured them his firm’s deal would be slightly less at $7.49 a gigajoule. And with an uncertain future for gas prices, locking in would be wise.
Chen mulled it over, and given her family’s financial situation signed up.
But afterwards, it turned out that Chen’s family was actually paying just $2.97 a gigajoule through FortisBC.
“What he (the sales rep) had done was he added up the individual rates on the natural gas bill — the delivery charge, midstream charge and cost of gas — to give us what we thought was the total cost (per gigajoule),” Chen said.
That method of calculation is incorrect, said FortisBC spokesman Michael Allison, adding the rates for delivery, midstream and gas commodity are independent of each other and a per gigajoule rate is not reflected by adding them up.
The only charge gas marketing companies, like Summit Energy, can sell is the commodity rate for the gas itself, Allison said. The delivery and midstream rates are constants FortisBC charges all of its customers.
According to the FortisBC website, the company does not profit on natural gas commodity charges; the price FortisBC pays for the commodity (the gas itself) is a flow through cost.
Flow through means that FortisBC purchases natural gas on behalf of its customers and passes the costs through to customers without markup. Customers pay what FortisBC pays for the gas itself.
Rates are reviewed each quarter and are based on a forecast of what the cost to purchase gas will be over the following 12 months, based on forward prices set by the market.
Allison added FortisBC does not solicit gas sales on a door-to-door basis and if a sales rep does show up, he advised to take time to reflect on the offer by looking at your current natural gas bill, and not rush into a decision.
FortisBC also has a list of tips to follow on its website (fortisbc.com/choices) if a salesperson does show up.
Now, Chen’s family is stuck with the prospect of paying much more until 2018 every time the mercury dips to an uncomfortable level after inking the deal with Summit Energy.
On average, the monthly cost of heating her parents’ home using the 35-year-old furnace is $250.
“It’s old and very inefficient,” Chen said. “We were told that getting a new, high efficiency one would cost us about $3,200.”
Add that to the home’s drafty, old windows, and the prospect is for a chilly next several months.
Chen said she would never have agreed to the deal through Summitt Energy had she known the correct gas charge with FortisBC.
But she has filed a dispute and is hoping there can be a resolution, and even a possible return to the rates charged by FortisBC.
Summit Energy’s Tamara Sinson, the firm’s manager of compliance and regulatory affairs, told the Richmond News she could not vouch for how the rate was calculated in Chen’s case, but confirmed simply adding the various rates on the bill is not what their salespeople are trained to do and is against the company’s policy.
Sinson added Summit Energy takes customer concerns such as this very seriously, and had never previously received a complaint of this nature.
“Obviously, we don’t want to have dissatisfied customers. So, we can conduct a thorough investigation,” Sinson said. “And if we do determine there was some misrepresentation there, then absolutely, we will release the customer from the contract and take whatever remedial action necessary to resolve the issue.”
According to the Better Business Bureau (BBB) in Mid-Western and Central Ontario, Summit Energy has been given a D- rating.
The Ontario arm of the BBB tracks the company since Summit Energy’s head office is located in Mississauga, Ontario.
The BBB’s files indicate there is a pattern of complaints for the business.
Specifically, consumers have advised the BBB that the Summit Energy’s door-to-door sales representatives use high pressure and deceptive sales practices. It is also alleged they misrepresent themselves (as being from a different carrier) and provide false information in order to get consumers to sign a contract.
There have also been actions by the provincial government in Ontario against Summit Energy.
Summit Energy, and other similar firms, participate in the Customer Choice program, which was developed in response to the provincial government’s 2002 energy policy.
© Copyright 2013