Driving away customers
Billing customers correctly and covering all costs can be a struggle at times. What do you bill for and what do you just consider a cost of doing business? It must all be covered one way or another.
There’s a contentious issue in Ontario right now between contractors and Enbridge Gas Distribution. Enbridge has started billing customers for installing gas lines. According to some contractors, there doesn’t seem to be any rhyme or reason to the charges. One home on a street can be $600; another on the same street can be $6,000. Enbridge says each installation is assessed and billed according to cost and difficulty.
But that, to me, is all beside the point. Gas utilities have not traditionally charged for installation because they have been happy to get a new customer. Installations were, as they continue to be for most utilities, a cost of doing business. They have full-time employees whose role it is to install gas lines.
Contractors have a big problem with the new approach because the cost of installing a gas line can be a deal breaker for a customer that is looking at building a new home or converting from electric or oil.
Gas has become the standard heating fuel in this country because it works well and it is relatively low cost. Perhaps Enbridge believes it is attractive enough that customers will pay whatever it takes. But with heat pumps increasingly becoming a viable option for home heating in many locations, a gas utility needs to be wary of doing anything that is going to discourage prospective customers.
Sometimes you just have to swallow a cost today for the long-term benefit. And for a gas utility, it’s a no-brainer. Once a gas line is installed, that home or building will likely be on gas indefinitely. The cost of installation will be covered.