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Direct Energy backs down on new water heater cancellation fees

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Direct Energy has suspended plans to charge a costly buyout fee to people who cancel their water heating contracts with the company, following a swift backlash from frustrated customers.

The energy service provider sent out letters earlier this month warning customers they were being switched to a new contract that would charge them a hefty fee – hundreds to thousands of dollars, according to reports – if they decided to cancel their Direct Energy service.

Customers would be automatically switched to the new contract unless they phoned the company by April 2nd, the letters said. That deadline was later extended to May 1 after Direct Energy was flooded with phone calls from concerned customers, many of whom could not get through.

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On Thursday, the company retreated from the plan entirely, saying in a statement that "no changes to [the]terms and conditions of our water heater contracts will occur at this time."

"I apologize wholeheartedly for the confusion this has caused to our customers, we have not communicated this initiative as well as we could have," Rob Comstock , senior vice-president of the company's Canadian services, said in the statement.

"I also want to say sorry to those who had difficulty getting through to us during a period of unprecedented call volumes. Please accept my apologies."

The company added that it still believes the contract changes, which also included a service guarantee and an inflation rate protection, would benefit customers.

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About the Author
Parliamentary reporter

Kim Mackrael has been a reporter for The Globe and Mail since 2011. She joined the Ottawa bureau Sept. 2012. More

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