Caveat emptor: natural gas deregulation
Around lunchtime I got a knock on the door, and a good-looking young woman was there to make a sales call for Univeral Gas. She was seeking to convert my natural gas supply under a newly deregulated market. I asked her if she would leave behind materials so that I could think about it. No dice. She wanted me to sign up on the spot to a five year commitment with a promise that my rates would not go up.
The pitch was well-made, and perhaps it would indeed save me some money. But the lack of information about what their prices were and how this deal would really work had my spidey senses tingling. After the sales call, I went to their website, and poking around I cannot find any information that tells me exactly what their price is, and what the base monthly fee is, nor whether there would be high fees for disconnecting with their service if I felt unhappy about it later (they bulk purchase and deliver through Terasen).
It is all predicated on a sense that prices are bound to go up so you should lock in now. Given a limited supply of natural gas, that may well be the case, but is their price actually a good one to lock into. I asked, what if prices go down? “Oh, the law of inflation, prices always go up, supply and demand, you know.” I did not tell her I had a graduate degree in economics.
Note the dates: if I were to plot just Jan 2003 to Jan 2007, the red “trend” line would look rather flat. If I were to include data back to 2000, when there was also a spike in natural gas prices, the red line would also look flat. And the blue “actual” line at the moment is quite a bit below their trend. In fact, apart from a couple price spikes at the beginning of 2003 and the second half of 2005, most of the blue line is below the red trend.
Talk about a hard sell. When I said I could not commit on the spot, she spun around and left rather quickly. I wonder what her cut of a sale is? Back when I did some door-to-door sales when I was about the same age, I got 25% of the sale.
All of which makes me question the benefits of competition in this market. BC used to have a publicly-owned natural gas monopoly that was privatized in the late 1980s. Since then the company has been flipped a few times and is now owned by an outfit operating out of Texas. And now we pile on with deregulation, which I suspect will only confuse most consumers, especially with these deceptive hard-sell tactics. Would we not have been better off as consumers with a public natural monopoly who could purchase in bulk on our behalf and pass the savings on through lower prices?