Competition Bureau strengthens competition in Ontario’s water heater industry
November 6, 2014
Agreement with reliance comfort limited partnership:
A consent agreement registered with the Competition Tribunal resolves the Bureau’s concerns with Reliance’s practices. The terms of this agreement apply in certain markets in Ontario and prohibit Reliance from:
- requiring customers to obtain authorization before returning a rented water heater;
- refusing to deal with other suppliers who return customers’ water heaters on their behalf;
- unreasonably restricting when and where water heaters can be returned;
- engaging in anti‑competitive retention tactics; and
- imposing unwarranted fees and charges on customers seeking to switch to another provider or terminate their water heater rental contracts.
Reliance must also take certain steps to make it easier for customers to terminate their rental agreements and return their water heaters to Reliance. It is also required to pay an administrative monetary penalty of $5 million and contribute $500,000 to the Bureau’s investigative costs.
Commitments from EnerCare Inc.:
After learning of EnerCare’s plans to acquire Direct Energy’s water heater rental business in Ontario, the Bureau approached EnerCare in order to reach a resolution that would put an end to Direct Energy’s anti‑competitive policies and practices after completion of the transaction.
It is important to note that EnerCare was not the subject of the Bureau’s application regarding Direct Energy’s practices and has not engaged in any anti‑competitive behaviour. However, given its acquisition of Direct Energy’s water heater rental business, the Bureau has obtained written commitments from EnerCare that it will not continue Direct Energy’s anti‑competitive practices. These commitments include:
- no longer requiring customers to obtain an authorization number before returning a rented water heater;
- honouring agreements whereby a new supplier can terminate a customer’s account on his or her behalf and return the old water heater; and
- opening new return depots to facilitate the return of its water heaters.
As a result of its acquisition of Direct Energy’s Home and Small Commercial Services business in Ontario, EnerCare will be one of the largest providers of water heaters in certain parts of Ontario. EnerCare and EnerCare Solutions own a portfolio of approximately 1.1 million water heaters and other assets, rented primarily to residential customers in Ontario.
Areas of operation in Ontario:
- Direct Energy primarily operated in areas where natural gas is distributed by Enbridge Inc., which generally corresponds to the Greater Toronto Area, the Ottawa region and the Niagara Peninsula. Under the proposed acquisition of Direct Energy’s water heater business by EnerCare, EnerCare would operate in the same areas.
- Reliance primarily operates in areas where natural gas is distributed by Union Gas Limited and in certain rural markets.
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