The Alberta government has developed tough new rules to ensure fairness and consumer protection when businesses begin marketing electricity to Albertans later this year.

As a result of restructuring of the Alberta electric industry, independent marketers will be allowed to provide electricity and electricity services to Alberta consumers beginning January 1, 2001, and may begin marketing to consumers this summer.

"Over the next several months, Albertans will be faced with a choice they have never had before - the choice to buy electricity from an independent marketer," said Government Services Minister Patricia Nelson, whose department is responsible for consumer services.

"We want to make sure consumers are treated fairly and that the businesses selling to them are competing on a level playing field. So we have put into place some very strict rules - rules that we intend to enforce just as strictly."

The rules are outlined in the Electricity Marketing Regulation, which comes into effect June 1, 2000, under the Fair Trading Act. The regulation requires that all electricity marketers intending to sell to residential consumers, farms or small businesses be licensed with Alberta Government Services, post a security currently set at $1 million, and comply with a code of conduct.

Under the code of conduct, marketers must show identification when approaching a consumer and must not lie to or mislead a consumer, take advantage of a consumer, or intrude on or exert undue pressure on a consumer. The regulation also requires that all contracts be in writing and include details of all costs and charges, as well as a statement informing the consumer that he may cancel the contract within 10 days for any reason and without penalty.

Nelson urges Albertans to become familiar with their rights and responsibilities in choosing an electricity marketer, and to read any contract in its entirety before signing.

"These rules and our enforcement of them will help protect Albertans from unscrupulous marketers, but we can't do it alone," Nelson said. "People have to help themselves by making sure they know what they are signing before they do it."

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Attachment: Backgrounder

Contact:

Megan Parker - Communications, Alberta Government Services - 780-415-6051

Legislation:

• The regulation comes under the authority of the Fair Trading Act.
• The Fair Trading Act prescribes penalties that include:
  • fines of up to $100,000 or up to three times the amount gained through the offence, whichever is more;
  • up to two years in jail; or
  • both a fine and jail term.

Licences:

• Electricity marketers must be licensed under the Fair Trading Act.
• An electricity marketer's licence must be renewed each year and costs $1,000.
• Licensees must also provide a security, currently set at $1 million.

Identification card:

• All people who work for an electricity marketer must carry an identification card, which must be produced at the request of a customer or potential customer, government investigator, or police.

Marketing contract:

• Must be in writing.
• Must include the following:
  • name, address, phone number of marketer and customer;
  • date electricity service begins;
  • all charges associated with the contract;
  • explanation that the consumer can inspect the marketer's records;
  • a disclosure statement read and signed by the consumer.
• A consumer may cancel the contract within 10 days without cause or penalty.
• Marketers must give each consumer a copy of his/her signed contract.
• A contract cannot be longer than a term of five years.
• A consumer must consent in writing to the renewal of a contract.

Disclosure statement:

• Term of the contract.
• Termination conditions for the contract.
• Responsibility of consumer if he/she moves within the province.
• Statement of 10-day cancellation rights, including methods of canceling.
• Alberta Government Services phone number for more information.
• Provision for the consumer to sign and date the disclosure statement.

Collection of fees:

• A marketer can only collect fees or other charges from a customer after the delivery of electricity begins.

Comparing prices:

• A consumer can ask a marketer to provide a statement explaining what the cost of electricity and electricity services will be, based on up to three of the consumer's electricity bills from the past year.

Code of Conduct:

• Marketers must not:
  • abuse a consumer's trust or take advantage of his lack of experience;
  • exert undue pressure;
  • lie to or mislead a consumer;
  • promise things not contained in the contract;
  • counsel a consumer to breach a contract with another marketer;
  • be intrusive or contact consumers between 9 p.m. and 8 a.m.;
  • say something is less expensive when it is not or when it can't be proven;
  • show prices in a way that is misleading;
  • use print that makes a contract difficult to read;
  • switch a consumer's electricity supply without his/her consent in writing.
• Marketers must:
  • identify themselves to the consumer and show ID card;
  • make timely, accurate and truthful comparisons;
  • ensure all advertising materials reflect actual conditions;
  • ensure data used to support a claim is reliable;
  • allow a consumer to cancel a contract if he moves out of Alberta.

Offences:

• It is an offence under the Fair Trading Act:
  • not to produce an ID card with required information on demand;
  • to have contracts that do not conform with the regulation requirements;
  • to collect fees before delivery of electricity starts;
  • not to have a consumer read and sign the disclosure statement;
  • not to comply with the code of conduct.

Effective date:

• June 1, 2000.