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Competitive Energy Retailers Could Face Service-Quality Regulation and Publication of Consumer Complaints

Reading Time 4 minute read

Energy Bulletin

Under the proposed legislation, described as being intended to protect electricity and natural gas customers from “poor service”, Alberta energy retailers could face service-quality regulation by the Alberta Utilities Commission, backed by administrative penalties of up to $10,000 per day for ongoing failures to comply. Another proposed law would re-constitute the Utilities Consumer Advocate with a responsibility to publish information relating to retailers’ compliance, including consumer complaints and their outcomes. This bulletin discusses aspects of these legislative proposals that are of particular relevance to retailers.

Retail electricity and gas supply in Alberta is offered by both regulated and competitive retailers, and consumers are free to choose between the two. Regulated retailers offer Commission-approved rates and services, and interact with consumers pursuant to tariffs and a statutory code of conduct that are enforced by the Commission. Competitive retailers, on the other hand, have generally been free from oversight by the Commission. Like other competitive businesses in Alberta, their interactions with consumers have been governed by the Consumer Protection Act (formerly the Fair Trading Act) and its regulations, with consumer complaints being subject to investigation by Service Alberta.

But Bill 13, An Act to Secure Alberta’s Energy Future, introduced last week, could see competitive retailers become subject to service-quality regulation, investigation and enforcement by the Commission as well. Bill 13 would empower the Commission to enact and enforce rules respecting service standards for competitive and regulated retailers, including rules respecting billing, billing services, customer care and call centre services. The Commission would have the power to investigate retailers to determine whether or not they are complying with these rules, and to enforce compliance by issuing directions or prohibitions (including directing a retailer to provide a customer with a credit) or by imposing financial penalties of up to $10,000 per incident or per day, for an ongoing failure to comply.

Service standards enacted pursuant to this power would not apply to municipally-owned regulated retailers.

Bill 13 would also make it easier for the Commission to impose financial penalties for contraventions of Commission rules, orders, or decisions. At present, the Commission may only impose financial penalties (“administrative penalties”) following a “hearing or other proceeding” to determine a person’s non-compliance. Bill 13’s proposed “specified penalties” mechanism would empower the Commission to penalize a retailer (or other person) for a failure to comply with certain rules, orders, or decisions specified in advance by the Commission, without any prior proceeding. (A person receiving a “specified penalty” would have a right to challenge the penalty, which would trigger a hearing).

The consumer-protection measures proposed in Bill 13 are accompanied by numerous other proposed changes to utility regulation in Alberta, some of which are likely to be controversial. These include the framework for implementing the capacity market for electricity, advancements in the regulation of small scale generation, and provisions empowering the Commission to allocate the costs and benefits resulting from dispositions of utility assets.

In addition to new oversight by the Commission, energy retailers and distributors could have to contend with the public disclosure of consumer complaints (and their outcomes), as well as retailers’ and distributors’ records of compliance with statutory standards and codes. Revisions to the mandate of the Utilities Consumer Advocate (UCA), proposed in Bill 14, An Act to Empower Utility Consumers, would give the UCA the responsibility to disseminate such “independent and impartial information”, and empower the UCA to acquire it from the Commission and the Director of Fair Trading, among other authorities. Bill 14 would also expand some parts of the UCA’s mandate to include water consumers as well as consumers of electricity and natural gas.

These proposals come in the wake of reports of elevated utility bills in the province, and are the latest in a series of consumer-protection measures enacted by the Alberta Government. In mid-December 2017, amendments to the Consumer Protection Act allowed the Minister of Service Alberta or the Director of Fair Trading to publicize information “obtained in or arising from” an inspection or investigation under that Act. The amendments also gave consumers a right to sue for damage sustained as a result of any breach of that Act or its regulations; mandated the creation of a Consumer Bill of Rights (yet to be developed); and prohibited businesses from enforcing mandatory arbitration clauses against consumers, among other things. Should the provisions in Bills 13 and 14 pass into law, Alberta retailers can expect their interactions with consumers to be subject to substantially increased regulatory and public scrutiny.


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