HPAC Magazine

Nova Scotia contractors rally against utility

September 30, 2013   HPAC Magazine

The natural gas heating industry in Nova Scotia is mobilizing to fight the local gas utility’s roll-out of a controversial residential marketing program that, in the view of industry members, “crosses the line” by intervening too directly in the HVAC marketplace. With the help of HRAI, the industry is engaging legal counsel to take the matter to the Nova Scotia Utility and Review Board (NSUARB) and is contracting with an expert in competition law to develop a case for consideration by the federal Competition Bureau. The program in question includes utility-approved, single-sourced products (boilers, furnaces, water heaters and conversion burners), offered to customers at utility-determined prices, with margins and product installation allowances for contractors also set by the utility. Under the terms of the program, the utility manages the sales process, distributing work orders to dealers on a rotating basis to participating contractors. Local members believe this program will seriously curtail competition in the marketplace by giving the utility too much power over product selection and pricing, not to mention determining which contractors will get the work generated by the marketing program. In April, local industry representatives, along with Martin Luymes from HRAI, met with Heritage Gas senior executives to discuss these concerns and to offer constructive suggestions for alternative ways to achieve the goal of increasing residential conversion rates that would be more acceptable to their industry partners. These suggestions were rejected without further discussion by Heritage Gas, and the residential marketing program proceeded according to plan. At the HRAI Annual Meeting in August, manufacturers and wholesalers expressed serious concerns upon hearing about the program and several have followed up by pledging to assist in underwriting the costs associated with a legal challenge of some sort. In July, the HRAI Board committed $25,000 to assist with any legal proceedings. With the help of HRAI, local members have met with legal counsel to strategize on how to approach the NSUARB, whether through a formal complaint, the rate hearing process or some other method. At the same time, discussions have started with an expert in competition law to help develop a case to bring to the federal Competition Bureau. For more information, contact Martin Luymes at 1-800-267-2231 ext. 235, or e-mail mluymes@hrai.ca. (From HRAI)

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