Energy Retailers and Energy Contract Renewals/Extensions

[Draft 1.0] If you are a person or small business in Ontario and are currently under an energy agreement with an energy retailer that is nearing the extension or renewal term, or perhaps have already and very recently extended or renewed such an energy agreement, it may not be too late to make the right choice.  Knowing what you can and cannot do can potentially mean the difference between securing better terms for yourself or your small business. 

Choosing the Right Energy Retailer

Before renewing or extending an agreement with an energy retailer, the Ontario Energy Board ("OEB") maintains a list of "Consumer Complaints Against Energy Retailers".  The OEB also maintains an exhaustive list of licensed "Active Natural Gas/Electricity Marketers". Cross-referencing the company names that appear in the list of complaints with those that appear in the list of active energy retailers is the safest course of action.  If you already find yourself in an agreement with a company that appears in the list of complaints, the renewal or extension period might be a good time to reconsider your options.  Searching for the presence of Google reviews may provide further insight.  The absence of Google reviews may be a sign of censorship, i.e. the company is managing its company by censoring Google Reviews. 

Energy Retailers and Renewals/Extensions

Also note that the OEB maintains a list of complaints against energy retailers by category of complaint.  The listed categories currently include: (1) sign up process; (2) management of contract during life of contract; and (more relevant to the purpose of this post) (3) renewal process.  If you are already in an agreement with an energy retailer that is nearing its renewal or extension period and your energy retailer appears in the category of complaints "renewal process", in addition to being extra diligent, perhaps it is the right time for you or your organization to reconsider your choice of energy retailer

Ontario's Energy Sector and Consumer Protection Rules: "Cooling Off Period"

Ontario consumer protection laws provide that every consumer in Ontario has, within 14-days (regular not business days) from the time of entering into an agreement for the purchase of goods and/or services, the unconditional right to cancel - without reason - the contract for the same said goods or services, regardless of the vendor's own contractual terms and conditions.  In other words, no sale is final. Directly in line with Ontario consumer protection laws, the Ontario Energy Board also provides, among other things, individuals and small businesses in Ontario with the unconditional right to "change their mind" about extending or renewing an energy agreement within 14 days (or in some cases, 30 days)(regular calendar days not business days).

Step 1: Does Your Energy Retailer's Agreement Include a Renewal Clause 

The first step is to verify that an extension or renewal clause is actually included in the energy agreement.  If there is an extension or renewal clause, the Ontario Energy Board states the following: 
"9. You can change your mind. You can cancel the renewed or extended energy contract with no penalty: within 14 days after you renewed or extended the contract by telephone or by sending the renewal  or extension form and other documents back to the energy retailer." (Source: Ontario Energy Board)
These terms supersede any terms or conditions written in an energy contract.  For instance, if the contract provides for a cancellation penalty, the same contractual provision cannot be enforced. 

Step 2: Are You Still Within the 14-Day Cancellation Period?

When does the 14-day period begin to run?  The 14-day period is made contingent upon the occurrence of one of two events: 
  1. From the moment renewal or extension is communicated to the energy retailer by phone; OR
  2. From the moment that the renewal or extension form and "other documents" is sent back to the energy retailer.

  • Renewal or Extension is Communicated to the Energy Retailer by Phone

With respect to (1) it would appear as if the 14-day period begins from the moment the renewal or extension is communicated by phone to the energy retailer; no mention is made of any requirement that an extension or renewal form be sent to the energy retailer.  For an extension or renewal by phone to be valid, the OEB also states that the call: • must include all the statements required by an OEB-approved script, and  it must be recorded by the energy retailer. If you ask for a copy of the recording, it must be sent to you within 10-days.  If any of these circumstances are missing, then the renewal or extension is not valid.
  • Renewal or Extension "Form and Other Documents" is Sent Back to the Energy Retailer
The 14-day "cool-off" period does not start if any of the following circumstances are present: 
  1. The "renewal/extension form and other documents" were not "sent back" to energy retailer;
  2. The renewal/extension has only been verbally confirmed but not by phone;
  3. The renewal/extension form was confirmed in writing but not "sent back"
  4. The renewal or extension form was "sent back" but without "other documents";
  5. "Other documents" were sent without the renewal or extension form.
What are the "other documents" that must be sent back with the signed renewal/extension form (in TWO (2) copies)?  According to the OEB, they are: 
  • Renewed or extended energy contract (as distinguished from the renewal/extension form);
  • Disclosure Statement with important information about energy contract from the OEB; 
  • Price Comparisons "in a form approved by the OEB". 

If (A) a renewal/extension form is not sent in two (2) copies; (B) sent in two (2) copies but without any of the above-listed documents; or (C) if any of the documents are not "in a form approved by the OEB", the OEB states that an energy contract can be cancelled at any time.

If any of the aforementioned circumstances (1 to 5) apply, then one can reasonably expect that the 14-day period within which one can cancel an energy contract does not start to run, i.e. an individual or small business retains the right to cancel the energy contract at any time. If none of the above 5 circumstances apply, then a consumer has 14-days to cancel the energy contract. What happens if you find yourself beyond the 14-day period?

Step 3: Was Your Contract Extended or Renewed on or After January 1, 2017?

  • Yes, the Extension or Renewal Was Entered Into On or After January 1, 2017
You have 30-days from the time you extended or renewed the energy contract to change your mind.  You will need to pay your energy bills regardless (strangely, the OEB states nothing about paying energy bills under agreements cancelled within the 14-day period).
  • No, the Extension or Renewal Was Entered Into Before January 1, 2017
You may still cancel your energy contract if any of the following circumstances are present: 
  • As of January 1, 2017, auto-renewals are not allowed and therefore not enforceable;
  • If the extension/renewal form does not include any of the following: (1) A "clear description of any changes to the energy contract for each renewal or extension option offered; (2) changes other than the contract's termination date, price, and any change required by law or the OEB's regulatory requirements; (3) a description of the actions you should take should you want to renew or extend the contract; (4) a place for you to sign if you do not wish to renew or extend the energy contract.