National Fuel Targets Door-to-Door Marketers

By David Robinson

National Fuel Gas Co. wants state regulators to crack down on energy marketers who go door-to-door to try to convince residents to switch their natural gas suppliers.

The Amherst-based energy company, citing complaints about misleading and confusing practices from some door-to-door salesmen, is asking the state Public Service Commission to adopt a new set of standards for energy services companies that rely on door-to-door sales.

“We’ve been concerned about their techniques and door-to-door sales practices for a while,” said Julie Coppola Cox, a National Fuel spokeswoman.

“We’re concerned that our customers are not being fully informed,” she said. “Customers are left to believe the folks are from National Fuel and not the marketer.”

National Fuel’s proposal would give the utility the authority to bar marketers who violate the new standards from selling gas to customers within the utility’s service territory.

The proposed rules would require door-to-door salespeople to inform consumers that they do not work for National Fuel and give the customers they sign up additional time to change their minds and opt out of the agreements without penalty. Door-to-door sales representatives also would be required to wear clothing, such as a jacket or hat, that displays the energy marketing company’s name and logo.

“I think something should be done and they’re on the right track,” said Gerald Norlander, the executive director of the Public Utility Law Project, an Albany-based advocacy group for lower- income residents.

Still, Norlander had reservations about giving National Fuel the authority to determine whether any rules had been violated and issue sanctions. Instead, Norlander said the PSC should take a more active role in penalizing energy marketing companies that violate the state’s laws.

“We’re privatizing the enforcement of public service laws,” Norlander said. “The PSC needs to be doing the sanctioning . . . Stronger guidelines are meaningless if you don’t have sanctions when they’re broken.”

The PSC is not expected to consider National Fuel’s proposal until April, at the earliest, while it seeks comments on the filing, said spokeswoman Anne Dalton.

While the proposed rules would affect all energy services companies that use a door-to-door sales force, they would have a major impact on U.S. Energy Savings Corp., a Toronto-based energy marketer that relies heavily on door-to-door sales pitches.

National Fuel sued U.S. Energy Savings last year in U.S. District Court in Buffalo, alleging that U.S. Energy was infringing on the company’s trademarks and using unfair competition practices. The suit alleged that U.S. Energy representatives falsely told customers that they were from, or associated with National Fuel. U.S. Energy, in court papers, denied the allegations.

In addition, more than 40 National Fuel customers in the Hornell area filed complaints with the PSC last month, alleging that U.S. Energy representatives used misleading tactics in convincing them to sign five-year fixed-price gas supply contracts that carried prices that were about 30 percent higher than current rates.

Nadine Evans, a U.S. Energy Savings spokeswoman, said the company is reviewing the National Fuel proposal and expects to file comments on it through an industry group.

The Illinois attorney general earlier this month filed a lawsuit against U.S. Energy Savings, alleging that it received more than 450 complaints about deceptive sales practices that falsely promised significant savings for consumers.

The state Consumer Protection Board and the New York City Department of Consumer Affairs also have urged the PSC to step up its scrutiny of the marketing practices used by all energy service companies.

e-mail: drobinson@buffnews.com

Originally published by NEWS BUSINESS REPORTER.

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