AuthorKris Kasawski

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Five Years As An Alberta Electricity & Natural Gas Provider

November 1, 2018 marked 5 years since Park Power launched onto the Alberta utilities market.  First as an electricity only provider and now offering natural gas and green energy to Albertans as well.  As with most entrepreneurial journeys, these past 5 years have had their ups and downs but I am happy to say that my journey continues as Park Power continues to grow.

To mark this milestone I thought I would put down some thoughts about what it’s been like to compete on Alberta’s utility markets against some really large incumbents.

  • Even though the Alberta electricity market has been open to competition since 2001, lots of consumers are still uninformed about the choices they have when paying their electricity and natural gas bills.  When I started promoting my business I would say that 50% of my time was spent educating the consumer about how the different sectors of the market functioned and that a consumer’s choice in provider did not affect the delivery of power or gas to their home or business.  These days I would say that consumers are getting more informed thanks in part to the work of the Office of the Utilities Consumer Advocate.  I also believe consumers are gaining knowledge due to the fact that our industry is undergoing some changes and as such is on the minds of Albertans more.
  • While Albertans are becoming more informed about the choices they have in the utilities market, it’s not the most exciting subject to think and talk about, therefore it’s not always top of mind for consumers.  As such I have learned to be patient with the consumer.  I understand that choosing a new electricity and natural gas provider may not be top priority for everyone most of the time.  So instead of using fearful sales tactics at your door during supper time to get you thinking about your energy bills, I have created a positive, community minded brand that might even make you smile when you think about electricity and natural gas.  So even as brand awareness and the customer base of Park Power continues to grow, I remain patient with the consumer because I am confident that Park Power is a better choice.
  • I came into this business with an Degree in Economics, 15 years working in small retail businesses, and the gumption to give it a go.  After 5 years I believe I can say that Park Power is capable of competing with the large, traditional incumbents who have pockets much deeper than mine.   This ability to compete is thanks in part to my branding and marketing efforts but also thanks to the great services and back office network provided by UtilityNet.  By operating in a business model that is more efficient with less overhead, Park Power is able to offer its customers low rates, with awesome Alberta based customer service, all while sharing our profits with awesome Alberta Charities.
  • Kindness matters, this rings true in life and business and for my business it has been a cornerstone.  I aim for Park Power to be a positive member of the community and as the face of the business I can leave a positive brand impression by being genuine and showing kindness.   I have built some great business relationships because of the positivity that I promote through Park Power.  It is heartening to know that building a brand with kindness in mind has created brand value that resonates with our customers.

These past 5 years have been a ride and I look forward to it continuing.

Many thanks to all the wonderful residences and business that have become Park Power customers.  Your continued support allows me to keep spreading the #localpower message and allows Park Power’s community contributions to get bigger every year.

 

 

 

Local Electricity & Natural Gas Companies Offering More Value for Less than Large Regulated Utilities

In 2009 UtilityNet decided to open their own electricity retail shop. The goal was simple, to offer electricity, natural gas, and green energy to Albertans for less. People told them they were crazy and that no one could compete with the incumbent government utilities.

They begged to differ and became the first local Energy Marketer to compete against the big retailers and subsidized regulated utilities. Today, over 20 other companies have joined us. This collective group of companies is known as the Peoples Utility, and was created with Albertans in mind.

When the Energy Marketer Model was started, UtilityNet knew they wanted to be different than the large Regulated Rate Utilities that dominated the market. They knew we wanted to be better.

Today, collectively our group now has customers in over 300 Alberta communities. We are focused on our local community but can offer services throughout all of Alberta. Most importantly, Park  Power’s guaranteed rates are lower than the government capped Regulated Rate Option (RRO). No one can compete with government utilities? We have proven that it is possible!

We are focused on providing local customer services; lower energy rates; educating consumers on the energy market; providing innovative services; and, un-complicating the complexities of buying energy.

We firmly believe that buying energy in Alberta should be simple, hassle free, with open contracts, with zero penalties, and fairly priced. Most importantly, we believe that provincial regulated utilities should not be allowed to ship jobs offshore and receive carbon tax dollar subsidies to help guarantee their profit margins.

Innovation Without Borders

Part of our strive to be different is our commitment to innovation. We are proud to offer a number of customer centric programs, most of which are unique to companies like us in the new People’s Utility.

Some of these programs include:

  • No exit fees: customers can leave or change rates with just 10 days notice with no fears of penalty fees
  • Energy options that include both variable and low guaranteed rates that protect consumers from price fluctuations
  • Special and lower rates for seniors
  • A strong community focused program of giving back to those in our local neighborhood
  • Pick-a-date program: letting our customers pick the date when they pay their utility bill
  • Budget billing: to help customers better manage their household expenses
  • A unique loyalty payment program which allows customers to earn rewards points
  • A number of green energy options focusing on the future

Many of these programs have been ignored by the large regulated utilities. This is what makes us different.

Concerned About the Future

Today, the private sector and other businesses like ours have never been more at risk. Current government policies, subsidies, and outsourcing (under this government and the previous governments) has had a major negative impact on the future health of our industry.

Alberta’s electricity market is going through a restructuring. The province will phase out coal-fired power plants and try to reach a goal of 30% of electricity generation coming from renewable sources by 2030. This transition could be expensive. The first major expenditure Albertans encountered on our way down this path was the cancellation fees of the Power Purchase Agreements (PPAs), which totalled $2.25 billion. This is money that the government had to borrow and loan to Alberta’s Balancing pool to keep it afloat. Additionally, to try to encourage more investment in Alberta’s power market, a new capacity market, which will guarantee those participating a guaranteed base income stream, will be introduced in 2021. In the end, consumers will be on the hook for all the extra costs that could arise.

With new policies already in the works, electricity prices have become unstable and an increase in prices has begun. In preparation for this the government has introduced a subsidy on the Regulated Rate Option (RRO). Regulated Rate providers like ENMAX, EPCOR, and Direct Energy are receiving millions of dollars in subsidies to keep their rates artificially at 6.8 cents/kWh. Funding for this subsidy is coming out of the Carbon Tax. Over $70 Million in subsidies estimated this fiscal year alone.

Why are we concerned? This policy is tilting the playing field towards the RRO utilities and away from small independent companies like ours. Additionally, many of the RRO utilities who are being subsidized are some of the same companies that have outsourced hundreds of jobs outside of Canada.

Regulated Utilities Cut Costs, Increase Profits and Ship Jobs Out of Alberta

Have you ever heard of the Local Multiplier 3 (LM3)? It was developed by the New Economic Foundation as a simple and understandable way of measuring local economic impact. The multiplier effect measures the number of times a dollar circulates within an economy. It was developed on the idea of the ‘leaky bucket’.

Think of this: ATCO outsourced over a billion dollars when they signed a 10-year deal with Wipro, a company out of India. $120 million a year. Direct Energy did the same and even sold off all their natural gas holdings for $722 million to a group from China. To a lesser degree ENMAX did the same by outsourcing their IT jobs to India. How many dollars using the multiplier will be lost to our economy?

If you imagine the local economy as a bucket full of water, every time you spend money that goes outside the local area, it leaks out of the bucket. Generally, our energy is focused on trying to pour more money into an area so as to keep filling up the bucket. However, a better starting point for strengthening the local economy should be to try to prevent the money leaking out in the first place. Remember – the money leaking out is your tax dollars.

Source: The People’s Utility

Last year, during the winter months, the typical homeowner spent about $38 for the natural gas they consumed, and an additional $26 for the carbon tax. This is an effective commodity tax rate of almost 70%.

At Park Power we believe strongly in a path towards a greener future and helping to green Alberta’s electricity grid, which is why we provide an option for our customers to green a percentage of their electricity consumption from 5% all the way up to 100%. But, the current RRO cap, funded by the carbon tax is not doing anything to move us towards a greener economy. We believe the carbon tax dollars should be used for what it was originally intended for.

Want to support a local Albertan company that doesn’t ship jobs out of the province and supports the local community? Sign up with Park Power today.

A Closer Look at Direct Energy

How Well Do You Know Your Utility Provider? A Closer Look at Direct Energy

Many consumers don’t realise that Alberta’s electricity industry is rife with cases of job outsourcing by some of the largest players in the game.

The business case for outsourcing jobs overseas is simple. Lowering operating costs helps companies increase profits, and supposedly remain competitive against others in the market. Sadly, as our core industries outsource more and more, the intellectual knowledge, software code, and experts in the market are being lost and gravitating to countries overseas. If Alberta wants to be a player in the Information Technology market, we should put a stop to exporting our knowledge and focus on encouraging some of our existing utilities to bring jobs back to Alberta.

It can be argued that the goal of most companies is to make a profit, so the outsourcing of jobs such as customer care or information technology seems inevitable. It’s just the way it is. Telus, ENMAX, Direct Energy, and ATCO are doing it, so why not others?

But is it right?

Today, it’s not only jobs that are being lost. Earlier this year there was a major sale of an essential Alberta asset, most notably the natural gas holdings that traditionally have backed the regulated rate supply of gas to consumers in Alberta. It was sold off by Direct Energy’s corporate holding company, Centrica, to a consortium of companies in China.

Every job exported out of the province means less money being circulated in our local economy. Once the jobs are gone, they won’t be easy to get back. If we are also selling off our natural resources, when all of this is said and done, what will be left for Alberta?

A Closer Look at Direct Energy as an RRO Utility Provider in Alberta

Is your energy provider guilty of outsourcing? If you currently get either your electricity or natural gas from Direct Energy, then the answer is yes.

When Direct Energy purchased the customer base from ATCO, they ended up owning the franchised territory of all the customers on the Regulated Rate Option (RRO) serviced within ATCO’s distribution zone. As a regulated rate provider, Direct Energy is guaranteed a profit under the government’s rate setting plan. As well, Direct Energy is being subsidized to the tune of millions of dollars – paid out of the carbon tax – in order to keep their electricity rate capped at 6.8 cents/kWh.

Is it right to subsidize a company that is shipping the majority of their jobs out of the province?

Here is a closer look at Direct Energy’s business and where its customers’ money is ACTUALLY going.

Pick up the phone and call Direct Energy at 1 (866) 420-3174. During the opening greeting you will be told that information will be processed outside Canada. Dig a little deeper and you will find that your phone call will be directed to either a call center in Guatemala or in the Philippines. The individuals don’t work for Direct Energy and are instructed not to tell you who their employer is. But, with the help from our friends at Google, the answer was just a click away.

Direct Energy bought the retail customer list off of ATCO a decade ago for about $200 million. Quietly, both ATCO and Direct Energy progressively moved jobs out of the country in order to squeeze a little more profit out of the business. This transition meant hundreds of Alberta jobs were lost.

Where Were the Jobs & Profits Outsourced to?

 

The Internet Technologies firm HCL Technologies bagged a contract from Direct Energy (Centrica) to implement and manage residential billing and customer care operations in the Alberta market. Who is HCL? You will find them trading on the Bombay Stock Exchange and their corporate headquarters are located in Noida, India.

For those that don’t know, Direct Energy is a division of Centrica PLC which is principally focused on the supply of electricity and gas to businesses and consumers in the United Kingdom and North America, with back-office functions located in India and South Africa. Don’t get us wrong this is an amazing company. The Calgary office is a state-of-the-art world class energy trading house which employs a number of young traders and three customer problem resolution representatives that are dedicated to dealing with customer billing errors. They also have a small number of employees in their Edmonton office, two of which are also focused on dealing with customer billing errors and the rest of which are regulatory and marketing staff.

According to the customer service representative we spoke to in the Philippines, the actual customer invoices are processed out of the Texas office and they use a post office box in Calgary to mail them out. When we called back to ask a follow-up question, the telephone routing sent us to a different representative in a call center in Guatemala. During this call we found that the official billing address for Direct Energy is P.O Box 1520 Station M, Calgary. That’s right, it is a post office box.

In their latest move, earlier this year Direct Energy sold off all of their Alberta gas holdings to a consortium from China. As Alberta’s major regulated rate gas supplier in the province; maybe the question that should be asked is, should the largest government regulated natural gas utility been allowed to sell off all their gas holdings? The new owners: a joint partnership including Mercuria (HQ Geneva), Can-China Global Resource Fund (in part, funded by China Exim Bank), MIE Holdings Corporation (HQ Hong Kong) acquired Direct Energy’s foothold in the province for $722 million.

If you dig a little deeper and look at their stock prices – it may help explain what is behind the divestitures. Did the slump in share value precipitate the cutting costs and selling off of assets? Sadly, Alberta was put on the chopping block.

 

 

https://www.centrica.com/investors/announcements-tools/share-price-tools/charting-comparison

 

So back to the question we asked earlier. Why support a company with Alberta tax dollars if their jobs and profits are being shipped out of the province?

Obviously, a lot of companies use outsourcing services to cut costs, so why pick on Direct Energy? Actually, we aren’t and in our next few blogs we will explore ATCO, who sold off their information technology business for $200 million, and who, under a 10-year outsourcing program, WIPRO will net over $1.2 Billion of jobs lost to Alberta. Also, let’s not forget ENMAX who relies on the TATA Group for programming services. HCL, Wipro and Tata are all rooted in India.

The truth is that between the new Chinese Consortium that bought Direct Energy’s gas business, HCL, Centrica, TATA, and WIPRO combined they now have a very large block of controlled influence over one of the most important aspects of the Alberta energy industry; “the Alberta Consumer”.

Current Practices will Impact Future Workers

If we continue to close down our technology operations, we will lose the digital technologies brain trust that is needed to compete in the future on the global stage. It is already happening as Direct Energy is simply now using a black box for billing, and their customer care staff read from prepared scripts. If we lose this foothold in the future of technology solutions, we will risk becoming a have not province. If we ship call center jobs to people in South America, Asia, or the USA we will lose good paying local jobs that Albertans can perform. If we move confidential customer data out of the country, we will lose control over the privacy and confidentiality of consumer data. As the phone message from Direct Energy Regulated Services will tell you – your data is being stored outside of Canada.

The reality is that future good paying jobs are now lost. Our children and our children’s children will be looking for jobs one day and they will be gone. They are not coming back, unless we say enough is enough and support Alberta made businesses.

Choosing a Local Company

 Consumers have a choice – accept what is happening; ask your MLA to address this issue in the legislature; or, simply switch over to a retailer who is local, has rates under the 6.8 cent artificial cap, doesn’t need to be subsidized by the carbon tax, and reinvests his profits in Alberta rather than shipping the profits out of the country.

Compare a local Alberta company like Park Power with Direct Energy as a regulated rate provider and you will notice some significant differences: low competitive rates, special rates for seniors, local customer care, budget billing programs, pick-a-date options, credit card payment options, green energy programs, no cancellation penalties, and a long list of community initiatives.

The list goes on. As we continue to grow, it is local companies like Park Power that will be around to hire the workers of the future.