“Just Energy” – the alternative to legislative solutions?

EDIT: Since writing this post, it has come to my attention that “Just Energy” is just a scam. The Better Business Bureau has rated them an F on a scale of A+ to F. I’m going to leave the post up, however, since their being-a-scam I think actually strengthens my central claim which is in opposition to firms (or scams) such as these.

It has been said by other contributors to BuryCoal.com that increased nationalization of the power grid is not politically possible in our current political climate.  So, maybe we should support private market solutions? What this might mean was made real for me when two representatives for “Just Energy” stopped by my house this weekend. “Just Energy” is a firm which sells electricity through the Ontario power grid to consumers who choose to pick it as their energy supplier. Consumers in Ontario, apparently, have various different options for purchasing power – they can pick the normal option (Ontario power), and pay the regulated rate. Or, they can go with an alternative supplier. Alternative suppliers might save them money in the short term when market rates are low, or in the case of Just Energy, people might be willing to pay more to know that their energy is coming from only “Green” sources.

So how does it work? You pay the market rate plus 3 cents per kilowatt hour, and in exchange all of your power is produced by hydro and wind. I asked the representatives if they were looking for more customers because currently they were under-producing, i.e. not putting as much power onto the grid than their dams or wind farms enabled. It quickly became apparent that this would be insane – so it seems that what happens is that if they are already supplying clean energy to all their “customers”, i.e. those who check “Just Energy” on their bill, they can sell power to the grid at the market rate. So, it’s quite understandable why they would want young minions running from house to house convincing you to pay them market rate plus 3 cents, since their opportunity cost is to sell it to the general grid at market rate.

Now, what is the logic here, from a consumer ethics point of view? It is true that supplying more capital to Just Energy will allow them to build more green power generation. Although, only if they believe that extra capital is warranted by the market demand for over priced (with respect to the market at least) “green” energy. What seems far more likely is that up to the point where they can supply all their energy to consumers willing to pay the extra fee, they will simply pocket the extra 3 cents per kw/h.

To my mind, paying above the market price for energy misses the point of being an activist for climate change entirely. Green energy is only “over priced” because the market rate does not represent the real cost of carbon heavy energy. The real cost is the extent to which man made climate change will make the future world a less bountiful one than the one we live in – we are effectively stealing from the future. Everyone, even Ron Paul, agrees that stealing is wrong, and that preventing crimes like theft is a legitimate role for government. What is disagreed upon, not just by the extreme libertarian right, but by the mainstream elite today, is that stealing from the future constitutes stealing. In Larry King’s words, “No one cares about 50 years from now.”

20 thoughts on ““Just Energy” – the alternative to legislative solutions?

  1. Milan

    Perhaps if companies like Just Energy and Bullfrog Power were legally obligated to devote all their profits to deploying renewable energy, paying them a higher rate for electricity would be justified.

    After all, building renewable power stations does a lot more to address climate change than the dubious offsets sold by many companies (all those based on forestry, renewable energy certificates, or HFC-tainted CDM credits are highly dubious).

  2. Milan

    P.S. I think the ‘objections’ category should be very sharply focused on responding to common arguments against leaving fossil fuels underground. It will be more effective if kept tightly constrained to that subject.

  3. Tristan Post author

    “building renewable power stations does a lot more to address climate change”

    Sure, but the real legislative solution is to make stealing from the future illegal, or at least impose a cost on it.

  4. .

    Council debates spending taxes on Bullfrog power
    Wednesday September 10 2008

    “Bullfrog invests 10 per cent of its profits back into organizations that promote sustainability, and is the only green power retailer in Ontario using customer demand to build new renewable wind generation in Ontario. New wind turbines have been built at Ferndale on the Bruce Peninsula, on Manitoulin Island and a six-turbine wind farm has been commissioned near Grand Bend on Lake Huron, according to a presentation by Coombe. By purchasing Bullfrog power, Caledon is also investing in the construction of further green energy facilities, even if building a commercial wind farm in Caledon proved to be unsuitable, pointed out Councillor Nick DeBoer.”

  5. Milan

    Everyone knows more or less what good climate policy would look like, if there was governmental will to create it.

    Right now, we are working in a world where that doesn’t exist federally. As a result, we need to try to advance whatever other options might make a difference. That includes provincial and municipal actions, regional initiatives (like the Western Climate Initiative), and private actions such as willingly paying more for energy to subsidize renewable deployment.

  6. Tristan Post author

    Ok ok,

    So – if what really matters is investment is renewable energy, why not just cut out the middle man? Buy power from the cheapest source available, and use the money you save to invest in clean energy firms directly.

  7. Milan

    It would be best if you could just give money that could only be used to build whatever sort of renewable energy is most cost-competitive. In Ontario, that is probably either hydro (large or small scale), wind, or switching coal facilities to burn biomass.

  8. Milan

    One other thing:

    Unlike Bullfrog Power, which is at least a legitimate business, some information indicates that Just Energy might be rather dodgy.

    Based on BBB files, this business has a BBB Rating of F on a scale from A+ to F.

    Reasons for this rating include:

    * Failure to honor commitment to arbitrate or mediate disputes.
    * 142 complaints filed against business
    * Failure to respond to 26 complaints filed against business.
    * 20 complaints filed against business that were not resolved.
    * Overall complaint history with BBB.
    * BBB does not have sufficient background information on this business.

    You might want to append a note about this to the original post.

  9. Tristan Post author

    “It would be best if you could just give money that could only be used to build whatever sort of renewable energy is most cost-competitive. ”

    You’re the one who thinks markets are so great. Become an investor, and invest in the company making the most cost competitive green energy. Sometimes the market supplies information through your own personal research (but only when it’s your own personal money).

  10. Milan

    Investing in a firm means directing money towards all sorts of activities, from advertising to dividend payments to shareholders. The most efficient approach (from a narrow perspective, perhaps) would be to somehow provide money that can only be used for deploying renewable generation systems, and which will not displace spending that would otherwise have been directed that way.

    From a broader perspective, perhaps the transition to zero-carbon energy is better served by funding the entirety of what renewable energy firms are doing. That said, I think it is plain stupid that Bullfrog Power donates 10% of their profits to charity, given that they are basically a charity themselves.

  11. Tristan Post author

    Agree re: Bullfrog Power.

    I see what you mean about the inefficiency of investing. My intuition tells me that money would be better spent on anti-coal and pro-carbon tax lobbying than on actual investments on the ground.

  12. Milan

    Renewable energy can’t possibly match the number of lobbying dollars put out annually by fossil fuel companies every year. While some lobbying might be a good use of resources, that approach doesn’t seem like it could ever be sufficient.

    Actual deployments are also very important for responding to counter-arguments against renewables. For instance, the more wind gets integrated into grids in Denmark, the less credible people who say relying on wind for a large share of power become. Some baseload solar plants in the southern US, Africa, and the Middle East could have similar demonstration value.

  13. Agent Black

    As someone with intimate knowledge of this industry (especially in the Canadian Markets), a firm such as JustEnergy (formerly known as the Energy Savings Group) the “Green Energy” program offered by them does not, I repeat DOES NOT ensure that your power comes from renewable sources, but rather “funds initiatives pursuant to the development of green energy”. They’ve been under investigation by not only major media outlets but every state and jurisdiction in which they’ve been given license to broker, mine being one of them.

    Your local distribution company can not help you, nor can any state or provincially-governed energy commission as their members comprise the companies committing the frauds. The only way to end the abuses is to contact your State Attorney’s office and demand action.

  14. Exasperated

    I find it so sad that Ontariio has fouled up the elecricity industry so much that it becomes easy for companies to pull the wool over peoples eyes. The retailers pay the market price of power and sell it for whatever they can get over and above that. None of them have ever lost money in the 8 years since they started. What does that tell you about their pricing? As for green power… Every customer in Ontario is already paying between 1 to 4 cents per kWh for all the energy they use to support the renewable contracts issued by the OPA. That value fluctuates every month and will only climb as we pay for the high renewable energy contracts (solar at 80.2 cents for example). The companies that add a renewable energy cap on their retail offerings are double dipping. They get 3 cents from the customer so they can use some of that for profit, then get a contract for the energy produced from the renewable facilities they build, and the customer pays that ON TOP of the Retailers contract !!! Pure theivery !

  15. Rose Harvey

    These “Just Energy” guys scammed me out of thousands of dollars by promising me a fixed rate per kwh back in 2007. It was fixed all right, at double what it was costing me if I had stayed with the local distribution company. I finally was able to get out from under that contract after 3 of the 5 years, although it did take 6 months and at least 4 phone calls. The 3rd guy I talked to was very rude, and I asked him how he slept at night after doubling my costs for hydro. He answered “I sleep just fine”. Of course he did – he was only doing a job and probably getting well paid for it.

    Then, yesterday, they had the nerve to send someone to my door describing this “green energy” plan. I let him talk for a while to see if I could figure out what the scam was this time, and I couldn’t get a straight answer, so I finally just told him I wasn’t interested and started to close my door. He just kept right on talking, and I had to ask him (in no uncertain terms) to get out of my house.

    Then, half an hour later, his buddy showed up wanting to know if I had gotten my “certificate”. I told him I had already said “no” to his friend, and I had to ask this guy to leave, and then I had to shut the door in his face to get him to stop talking.

    What a bunch of greedy b——s this company is made up of. I don’t believe they are doing anything about “green energy”. The only “green” is going into their pockets!

    BEWARE!
    roseh

  16. Tara

    Just Energy owns plants in Ontario their JustClean home program funds the creation of these projects. There is NOT a contract involved in that program and they are NOT like “Direct Energy”. So assuming a person at your door is a scammer is like assuming that black people are thugs: yes historically and statistically it’s happened but how do you know unless you listen?

  17. Milan

    There certainly seems to be good reason to be wary of Just Energy, given all the bad experiences people have been having.

    As far as alternative energy providers go, I have heard much better things about Bullfrog Power.

  18. Derek Seabrooke

    On the surface Tim Hudak and his Progressive Conservative party seem to be all-around nice guys. They are concerned about you and your family and want to do everything they can to help ends meet and ensure your family doesn’t get ripped off by anyone. They are in fact so nice that they are willing to promise an HST rebate on your hydro and gas bill just to show how much they care about your ability to pay for your needed utilities.

    What you may not know is that this very same party lead under Mike Harris and Ernie Eves de-regulated the energy sector during their time in power.

    Have you ever gotten a knock at your from a representative of an energy reseller such as Universal Energy or Just Energy? They want you to sign up for fixed rate contracts. Does this sound familiar? In fact many people believe that fixed rate energy deals like this are some kind of illegal scam. In fact they are not illegal at all because Harris and Eves passed laws which allow third party companies to make contracts with the consumer and your local utility is required to honour the deal by co-operating with it. Do you remember agents like this coming around before Harris? If you find that the price that you signed up for far greater than the market price, even after you’ve been on it for years there is no legal recourse that will allow you to renege without paying a cancellation fee.

    The business plan is called commodity brokering. Companies claim that they buy gas and hydro from the spot market in bulk, at times that its cheapest, natural gas in the summer for instance. Then they sell it back to the consumer at a fixed price. Because natural gas is expensive in the winter, in theory they will be able to sell it back to the consumer for more than the original purchase price but less than the current market price. Thus they can save you money while turning a profit. It all makes sense right?

    The argument is logical. Nevertheless many consumers who have signed up for these contracts since the time they were first offered have found that in the long run they lost money, often to the tune of thousands. Where is this money going?

    Frank Klees, sitting Progressive Conservative MPP for Newmarket-Aurora is running again in the October 6, 2011 provincial election. He is the guy that came in second to Hudak in the last provincial leadership race. He is a high profile Tory who held cabinet positions under Harris and undoubtedly will again if the Progressive Conservatives make it in this time. The owner of Universal Energy Alternatives underwrote one fifth of his entire campaign with a donation of $34K. Not only did Universal give Klees a big donation, they also gave him a seat on their board of directors. Now that Universal Energy is sold to Just Energy, he has a seat on the board there too. In other words if you want to vote for the guy that comes to your door to sign you up for a price protection plan then Frank Klees and his cronnies, like Hudak are the names you should check on your ballot!

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