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The Provincial Benefit rate rose to 4.33 cents per kilowatt hour in the fall of 2009. The Provincial Benefit is an additional fee charged only to wholesale electricity buyers and people who sign contracts with distributors. It is money that, like a tax, goes to the government - but unlike a tax is only charged to people that have made the choice to participate in the privatized electricity system. Like my house - we were Direct Energy Subscribers.
I have a problem with Direct Energy because of how they treat me and my friends. Even though the Ontario Energy Board is the entity that issued the rule about sending written notice to cancel the same rule is relaxed when it comes to cancellation. The OEB developed a rule to against making provider issued forms mandatory, but did not clarify what a standard cancellation looks like. You have to make your own, taking a risk in missing the essential information and any other applicable notices.
I support people being able to generate their own electricity, I do so myself as much as I can - but I still enjoy the security and stability provided by Welland Hydro - our hometown hero even if they are after our money. Welland Hydro needs money, and in exchange they offer a service - a real business model. They fix the lines, build new ones, look out for energy deals that are passed on to the subscribers, and my personal favorite is that they support municipal wireless Internet in Welland. Other utilities may do the same, and I hope they do.
My issue is with the tag team effect that Direct Energy and the Province of Ontario have on our bill. Welland Hydro averages just below 5 cents per kilowatt hour. Direct Energy sold my house a flat rate 8.9 cent plan, and with that comes a 4.33 cent provincial adjustment in August 2009. We used 2850 kWh!
Lets do the math: 2850kwh(8.9c+4.33c) = 2850kwh*$0.1323 = $377.06
Flop on top the line charges, debt reduction fees and a large bill becomes a ridiculous one. So with no further pause - how to cancel with Direct Energy and save some money by avoiding the Provincial Benefit charge:
1) Gather your Direct Energy Contract, an envelope, a stamp, a pen, and a piece of paper.
2) Read your contract, and if necessary call Direct Energy to find out exactly how much it will cost to terminate. It is very important to agree to the terms - and understand them. I'm not your accountant and cannot guarantee you wont lose more money this way.
3) Write down your intention to end the contract, and agree to the termination repayment option as seen in the contract.It should go something like this:
"This is my intention to terminate my energy distribution contract with Direct Energy, effective immediately. I have read the section of the contract regarding termination repayment and agree to the terms. I would like a formal invoice for the termination to be send to me as soon as possible.
(Your name here, followed by your account number on the contract)"
4) Send out the letter to the address on your contract. It will take some time, but they will process it properly. If they don't - don't ask me what to do, in fact ask an attorney or someone who can officially speak for either the Ontario Energy Board or Direct Energy.
Finished. Your money will go to your local utility and you can complain about them exclusively. No distributor, no additional fees/taxes that others don't see. While you're feeling so smug and saving some money consider looking at some solar panels and stick it to the utility too. Good luck.
Addition (04/22/2010): We have seen a major reduction in our bills since cancelling, nearly $150 over last year. We also saved money by cancelling cable and switching back to an antenna from Antra in Ontario (don't forget the pre-amplifier). And five other money savers: E-Bike (temporarily nix gasoline and insurance), Garden/Conservatory (more of a hobby than an economical choice), and LED Lighting (Good or Best)
Addition (06/22/2011): The savings keep on coming. I recently had a chance to compare bills with a couple of friends. Including HST in a four (4) person house the bill with a distributor came to nearly $450 (recalculated to the old bi-monthly), the bill at home (5 people) is around $220 for two (2) months without a distributor, and a friend living with his new wife chimed in at $90 over two (2) months. Provincial benefit + HST + Time of Day Billing is making a killing for the province and these energy companies.
Addition (08/02/2012): Since posting this article many new changes have improved bills in Niagara. For nearly a year now the bill has been 12% of what was paid in 2009. This has to do with the great electricity rates in Welland, household participation in time of use billing, LED lighting, and more efficient refrigerators, computers, and other appliances. The downside is that now my auto insurance bill is twice as large as the electricity bill (just a comparison, I like my insurance company). Good luck bringing your bill down.