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Roseman: Break free from Direct Energy by buying your own water heater


This article was published in the Toronto Star a few years ago, but it still rings true today. See what Ellen Roseman thinks about the water heater rental companies in Toronto.

By: Ellen Roseman. On Your Side. Wednesday, March 14 2012

I’m pulling the cord on Direct Energy. I just sent an email, saying I plan to buy the water heater I currently rent.

Of course, it’s cheaper to own your water heater. But in Ontario, renting is convenient because the utilities include the cost in customers’ energy bills.

I made the move to ownership after I started hearing from Direct Energy customers. They were upset to find new contract terms would be imposed on them unless they called to opt out by April 2.

I wrote a column last Saturday about the company’s decision to charge fees of $200 to $1,000 to cancel rental contracts. (You can cancel at no cost under current rules.) The trickle of email became a flood over the weekend. Many people had yet to receive their letters, but they felt the terms were unfair.

How could Direct Energy force you to accept changes if you didn’t call to say no? Why give less than 30 days’ notice? Wasn’t negative option billing banned in Ontario in 2005? On Monday, I heard from many customers who were in a panicky state. They couldn’t get through to Direct Energy when calling the number given in the letter.

“I have been on the phone for three hours on redial, trying to keep my existing contract,” said Fred Goodall. “They must be overloaded with people cancelling the new contract.” Charles Shaver was disconnected a few times before reaching the call centre. Then, he was upset that he couldn’t get a written confirmation of his request to keep the old contract. Confusion was a common theme. Many people thought the letters were about offering a service guarantee and inflation price protection.

Only the penultimate paragraph — which was not in bold print — mentioned the need to call by April 2 “to retain your existing agreement unchanged.”

Should you accept Direct Energy’s new contract? Here’s my look at the pros and cons.

  • Pro: If your hot water goes on the blink, you’ll get it back within 24 hours of contacting the company. But that’s no big deal. Many heating contractors promise four-hour service on evenings and weekends.
  • Pro: You’re guaranteed that rental rate increases won’t exceed inflation. Again, no big deal. The new contract applies to older water heaters ranging from seven or eight years old to more than 15 years old. Direct Energy doesn’t do any regular inspections, so the servicing cost is low
  • Con: If you sell your house, the water heater rental contract stays with it. New owners who want to buy their own unit are stuck with Direct Energy’s cancellation fee. It’s easier to sell a house without a rental contract.
  • Con: Your water heater lasts 15 to 18 years, maybe longer. But if you want to buy or rent from another supplier before the tank dies, you have to buy it from Direct Energy and dispose of it (a cost not mentioned in the letter). New rental suppliers can’t take care of the disposal, as they do now. (*CLARITY by ClimateCare contractors can help facilitate your disposal now*)

Maybe it’s time to take the plunge and buy the water heater you now rent.

I called Direct Energy to ask about my 50-gallon conventional water heater, installed in January 2000. I could buy it and own it for a cost of $131.08 (including HST).

Since I pay about $17 a month in rental fees, I’ll break even in under a year. Yes, I’ll have to find a contractor if my tank breaks down. But many firms sell and service water heaters. You’ll find names at the Heating, Refrigeration and Air Conditioning Institute’s website, www.hrai.ca.

Bye bye, Direct Energy. The contract changes you’re making so arbitrarily show your disregard for customers like me. I’m standing on my own from now on.

In 2019, a lot of this still rings true.

The main reason many homeowners choose to rent is the convenience. You don’t really have to do anything.

Today, owning is just as convenient.

  • We disconnect your old water heater and install your new one.
  • We return the old water heater to the utility company.
  • We schedule your annual maintenance so you don’t have to think about it.

CLARITY by ClimateCare is also more readily available to you than Direct Energy or Enercare. If you have a problem, call us. You’ll get a live person right away, a local HVAC professional who will understand and handle your issue.

And you’re not just a number, working with a faceless corporation. CLARITY by ClimateCare retailers are local businesses in your neighbourhood that have been in your community for decades. We live where we work, and we care about the relationships we build. It’s one of the things that sets us apart.

What about guarantees?

The rental companies will increase your rental rate by up to 3.8% every year. But when you buy from CLARITY by ClimateCare, your rate won’t increase ever, and eventually your payments end. You own your equipment outright.

It’s not hard finding your nearest CLARITY by ClimateCare member. We have 34 locations across Ontario.

Ontario homeowners do not have to rent their water heaters. Turn the page on renting your water heater. Turn to CLARITY by ClimateCare!