Natural gas prices dropped again this month, but those who locked into contracts with gas marketing companies three years ago won’t be enjoying the savings.
Since the gas industry was deregulated four years ago, private firms have been allowed to sell natural gas on five-year contracts, although Terasen still delivers the commodity.
The locked contracts save a customer money if gas rates go up. However, if they go down, the consumer keeps paying the contract rate. In some cases, the difference can be significant, and expensive.
There is a simple method of getting out of a natural gas contract, and “Joe Gasguy” wants to share it.
Gasguy wants to remain anonymous, but he is a Kelowna man with a job that gives him an opportunity to look at a lot of gas bills. He estimates 20 per cent of the invoices he sees have people paying more than double what they should for the commodity. He guesses that three-quarters of them involve an elderly demographic.
Gasguy knows a simple way out. He explained the tactic in letters to the editor he sent to newspapers across B.C., and said the response he got was “a little overwhelming.” So, he started a website – www.gaswise.info
Most of the contracts with gas marketing companies are terminated if the consumer no longer has an account with Terasen gas, which delivers the commodity. He advises people stuck in high-priced gas contracts to simply switch their Terasen account into somebody else’s name.
His website explains how to read your gas bill, and how to respond when the marketers call to find out what happened to their customer.
Terasen sells gas to consumers at the commodity cost, without markup. In May of 2007, the B.C. gas market was deregulated, allowing firms to sell contracts at fixed rates for up to five years.
In the summer of 2008, natural gas rose to $9.78 per gigajoule (GJ). At that time, marketers were able to sign consumers to contracts that locked them in at rates of $10 and $11 per GJ.
Since then, costs have dropped, and Terasen this month announced a new rate of $4.45 per GJ in the Lower Mainland.
Gasguy said marketers have a role to play. A consumer can presently “lock in” at a rate of about $6 to $7 per GJ with some marketers, and he said it is easy to see natural gas rising above that rate in future. As with a mortgage, a consumer can pay a little more for price certainty over the longer term.
However, he said consumers need to carefully read termination clauses in any contracts they consider, and the associated costs.
Gasguy takes issue with the way the gas companies conduct business, using door-to-door sales. Often, consumers don’t realize they are signing up for five years.
The B.C. Utilities Commission has received numerous complaints about gas marketing companies.
“I got caught myself, and some friends of mine, and it was quite frustrating knowing I had been duped.”