Energy resellers

Many condo corporations take out long-term contracts with energy resellers to lock in fixed prices for utilities, usually natural gas and electricity.

When gas prices rise, the condo is protected from the increase in prices. When gas prices drop, like they have been for the last few years, the condos pay more for natural gas than they should.

What is little known is that the property management companies often have ties with energy suppliers. Also there are "commissions" or finder fees that the management company may receive when condos sign up.

Re-negotiating contracts
If a condo starts hollering that the prices they are paying are far too high, sometimes double what the gas companies are charging, the re-seller may open the contract and reduce the price. However, this comes at a cost as the re-seller will insist on the contract being extended over a longer period.

Cancelling the contract
A condo that wants to get out of a bad deal will find that there are very high penalties for cancelling the contract.

Value added?
The energy re-sellers don't own any part of the natural gas chain. They don't own the gas fields, the pipelines, tankers or the distribution centres. They pay the gas companies the going rate for gas and collect a different, usually a higher, price from their customers. That's it.

Unlike building insurance, energy re-selling seems to me to me to hold little long-term value to either condominiums or to individual home owners.

The board decides
Most often the board will sign a contract with a reseller and often the owners are not aware that this contract exists.

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