Calculating the costs of Ontario’s electricity: which sources add the most to our bills?

More transparency in the Ontario Energy Ministry  would reveal important facts, sooner 

The Ontario Energy Board (OEB) took more than nine months to compile and release what they label Ontario’s System-Wide Electricity Supply Mix: 2017 Data, a one-page document identifying the Electricity sources and the “Electricity Mix.”  The data includes both TX (transmission-delivered electricity) and DX (distributor-delivered electricity), but only in percentage terms. In order to determine the amount of electricity actually generated by the “Supply Mix” one must go through a mathematical exercise.

Lagging transparency

If one wonders why it takes nine months and why the OEB won’t supply the amount of electricity delivered by each of the “Electricity sources” you wouldn’t be alone.  Why have we spent billions on “smart meters” and the “smart grid” (developed by IESO) and the data can’t be provided within, say, the first Quarter of the following year?  That question should be raised by our elected politicians as the ratepayers of the province would like to know that all those billions weren’t wasted.

Digging deeper

Going though the math exercise isn’t unduly onerous; if one uses nuclear as the base (generating 60.1%) and the IESO “2017 Electricity Data” the information shows nuclear generated and delivered 90.6 TWh (terawatt hours), so the other percentages can be used to calculate the actual electricity delivered.  As all of nuclear generation is grid-connected, the total electricity generated (DX + TX) for 2017 was 150.7 TWh.  From that it is easy to determine solar with 2.2% generated 3.3 TWh, wind 10.85 TWh, hydro 38.6 TWh, biomass .6 TWh, natural gas 6.0 TWh and other .45 TWh. Add those figures to nuclear generation of 90.6 TWh and it comes to 150.7 TWh

The next step is determining the costs of those generation sources so we ratepayers can judge if they are giving us value for money. That is easier said than done; however, there are enough clues and information available to give us some reason to believe we will come close to disclosing costs.

Let’s start with the HOEP average for 2017 which was $15.81/MWh (megawatt hour) or $15.81 million per TWh meaning the 150.7 TWh of generation represents a cost of $2,282.6 million. The GA (Global Adjustment) inclusive of Class A and B for 2017 total was $11,851 million making total generation costs $14.233 billion for the 150.7 TWh.   Other costs such as transmission and wholesale market service charges add another $1.8 billion to total costs.  Adding the latter brings total cost to $16.033 billion.

If one than examines total Ontario demand for 2017, it would be the 132.1 TWh that IESO claim in their year-end report plus generation within the DX sector of 4.45 TWh making Ontario demand 136.55 TWh.

Finally, If one estimates the revenue generated from “net exports,”* reported as 12.471 TWh at the HOEP value of $15.81 million per TWh, the net revenue generated was $197 million reducing total electricity costs to $15.826 billion.

Putting total Ontario demand (136.55 TWh) in context, nuclear generation of 90.6 TWH and hydro’s 38.6 TWh together provided 94.6% (129.2 TWh). In 2017 OPG was forced to spill 6 TWh and Bruce Nuclear steamed off 1 TWh meaning those two generation sources could have supplied almost 100% (99.7%) of Ontario’s total demand.  Gas generation (10,548 MW capacity) could have easily supplied the balance including peak periods as they operated at only 6.5% of capacity.

So, what did wind and solar cost? 

Wind generated 10.85 TWh so at $135/MWh cost $1.465.000,000 + curtailment of 3.3 TWh at $120/MWh, added $396 million, making the total cost from wind generation $1,861,000,000. Solar generated 3.3 TWh so at an average of $448/MWh would add costs of $1,478,400,000

The two together — without including spilled hydro or steamed-off nuclear or gas back-up — totalled $3.339 billion.

The math calculation to get the actual cost of 2017 Ontario consumption therefore is simply dividing total electricity costs of $15.826 billion by 136.55 TWh, giving a per kWh cost of 11.6 cents kWh!

Without the total costs of wind and solar of $3.339 billion the costs of electricity consumed by Ontario electricity customers would have been $12.487 billion or 9.14 cents a kWh. That would have been 2.5 cents a kWh less than we experienced with wind and solar as generation sources.

The additional costs of wind and solar in 2017 added approximately $220.00 per average household to their electricity bills. Should wind and solar contribute similarly over the next 20 years the costs to Ontario ratepayers will be in excess of $66 billion.

The time has come to demand more transparency and to re-evaluate the details in long-term wind and solar contracts.

PARKER GALLANT

PS: Scott Luft has created pie charts that highlight much of what is contained in the foregoing article and they can be found here: https://twitter.com/ScottLuft/status/1050045294287745024/photo/1?ref_src=twsrc%5Etfw%7Ctwcamp%5Eembeddedtimeline%7Ctwterm%5Eprofile%3AScottLuft&ref_url=http%3A%2F%2Fcoldair.luftonline.net%2F

*exports less imports

 

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Hydro One’s profit engineering and the Fair Hydro Plan

Who gained the most under the Fair Hydro Plan? Not you. Hydro One comes out the winner

That baby is still not happy… who comes out on top with the Fair Hydro Plan?

In the section titled ”Other Regulatory Developments” in the “Management’s Discussion and Analysis” chapter of Hydro One’s financials for the year ended December 31, 2017, is this interesting note. (The emphasis is mine.)

“In March 2017, Ontario’s Minister of Energy announced the Fair Hydro Plan, which included changes to the Global Adjustment, the Rural or Remote Electricity Rate Protection (RRRP) Program, the introduction of the First Nations rate assistance program, and improving the allocation of delivery charges across the rural and urban geographies of the province. Hydro One worked collaboratively with the OEB on the First Nations rate assistance program, and was a key stakeholder in providing solutions that address both the Global Adjustment and RRRP elements. The Fair Hydro Plan came into effect on July 1, 2017 and resulted in a reduction of approximately 25% on electricity bills for typical Ontario residential customers. The Province also launched a new Affordability Fund aimed at assisting electricity customers who cannot qualify for low-income conservation programs. Additional enhancements were also made to the existing Ontario Electricity Support Program (OESP).

Hydro One customers saw the full benefits of the Fair Hydro Plan for all electricity consumed after July 1, 2017. A typical rural residential customer using 750 kWh per month will see savings on their monthly bills of 31% on average, or approximately $600 annually. These changes did not have an impact on the net income of the Company.

Now, fast-forward to the release of Hydro One’s 2018 2nd Quarter results and there is no mention of the Fair Hydro Plan, the Global Adjustment, the RRRP or the First Nations rate assistance program!

In the recent report, Hydro One simply brags about the big jump in its net income. That jump was supposedly due to approval of a substantial transmission rate increase and favourable weather noted as “higher energy consumption resulting from colder weather in April 2018”!*

The actual growth in revenue for the six months was only $24 million; however, after-tax net income** year over year increased from $284 million to $422 million, showing an increase of $138 million or 48.6% for the comparable six months.

Dreams come true … for Hydro One

If one looks at gross revenue less the cost of “purchased power,” Hydro One’s RoR (Return on Revenue) for the six months was 25.6% (after-tax). Any other service provider or retailer could only dream about growth like that!

So, was the $138 million improvement in net profit a reflection on the now retired, six-million-dollar man’s achievements or other factors?

Let’s look at a few aspects of the results.

As it turns out, the “substantial transmission rate increase” generated additional revenue of $123 million. The transmission revenue is paid for by all local distribution companies (LDC) and included in the “delivery” line on electricity bills. The result of the $123-million increase collected by Hydro One (and all LDC) in delivery costs should have increased that line on the bills, but for Hydro One customers, it didn’t!   The “delivery” costs for Hydro One customers is estimated to have decreased from about 8.2 cents/kWh to 5.4 cents/kWh and “distribution” revenue fell by $96 million despite increased demand of 5.4% (697,000 MWh) in the comparable six months.

Another significant item affecting the positive results is related to what Hydro One paid for the cost of power which fell (despite increased demand) by $113 million from $1.538 billion to $1.425 billion and also fell for “delivery” line items previously included on hydro bills.

The kickbacks, under the Fair Hydro Plan, resulted from moving the “purchased power” costs to future ratepayers and by moving costs of issues such as the OESP*** and “conservation” spending to current taxpayers.

Those cost shifts naturally had a positive effect on Hydro One’s earnings.

In addition, and as noted in an article in the Ottawa Citizen Hydro One is responsible for monitoring “the energy production and pay thousands of FIT and MicroFit producers across the province, it is no longer able to share any information about those contracts publicly.”

Worthy of our trust?

Hydro is simply required to submit a bill to the IESO for the generation produced for all the MicroFIT contracted parties on their distribution network. Those bills are submitted monthly without scrutiny by the OEB or IESO, and IESO simply writes them a cheque the cost of which is billed to all of Ontario’s ratepayers.

Should we trust Hydro One’s billing process for those thousands of FIT and MicroFIT producers, knowing that back in 2015 Ontario’s Ombudsman reported they issued more than 100,000 faulty bills to their customers? Privatization by the former Ontario Liberal government has resulted in a monopoly, now operating without oversight.

The Ottawa Citizen article about this issue had a fitting comment from Steve Aplin, an energy environment data specialist (website Emmissiontrak): “That’s what happens when you break up this system. Now, nobody is minding the store. It’s outrageous that the IESO, they send the cheques. You don’t just blindly send a cheque off to somebody. There must be some fiduciary responsibility.”

The results of Hydro One working “collaboratively” with the OEB reduced revenue in a positive way for them, as they shifted costs to future ratepayers and current taxpayers, generating higher profits.

Additionally, despite ratepayers picking up the billions in costs for “smart meters” and the “smart grid” neither the OEB or the IESO seem able to execute their fiduciary responsibility!

From all appearances, improving results for shareholders is more important now than containing costs for ratepayers and taxpayers for Hydro One, IESO and the OEB.

© Parker Gallant

*A quick estimate of additional April demand for Hydro One suggests increased distribution revenues of $10 million at say $50/MWh for the additional (estimated) 200,000 MWh their ratepayers consumed.

**Net Income before costs attributed to the planned acquisition of Avista Corporation.

***Hydro One has consistently had the highest percentage of dollar amounts in customer arrears. In 2016 they had almost 52% of all dollar amounts of arrears of $69.7 million.

 

Is the IESO finally trying to get it right?

The baby’s not happy… are his parents being scammed?

One of the IESO’s responsibilities is to ensure Ontario ratepayers are billed fairly. That’s been a challenge with more than 100 “directives” from the former Liberal government. First in a series

July 30, 2018

Ontario’s Independent Electricity System Operator (IESO) is responsible for monthly settlement (dollars in and dollars out) with all LDC (local distribution companies), transmission companies (Hydro One) and with thousands of generators of various stripes connected to the TX (transmission gird) and DX (distribution grid).

In order to capture the vagaries of what the monthly settlement encompasses, the IESO have a 164-page market manual entitled, “Settlements Part 5.5 Physical Markets Settlement Statements Issue 69”.  Its effective date was March 7, 2018, the fifteenth update of the manual over the last three years!

I’m confident the 15 recent updates were a result of directives emanating from the desks of former Liberal Ministers of Energy, namely Messrs. Bob Chiarelli and his successor Glenn Thibeault, and include the actions related to the Fair Hydro Act and the rebate of the 8% Provincial portion of the HST.

The directives and the changes they entail indicate the IESO is trying to “get it right” in their responsibility in dealing with the variables. Those variables were created by the Liberal government as it toyed with the energy portfolio over the last 15 years in so many ways via those directives (117 to OPA/IESO alone).  As an example, IESO in 2017 was responsible for settling about $16 billion related to the costs of generating electricity (what the public is charged for the combination of the HOEP (hourly Ontario electricity price) and the GA (Global Adjustment).

Ensuring ratepayers are correctly billed and generators are paid no more than they deserve places a lot of responsibility on IESO to ensure ratepayers are not being scammed!

On the latter point it is worth noting a CBC article from just seven months ago stated:  “Hydro customers shelled out about $100 million in ‘inappropriate’ payments to a natural gas plant that exploited flaws in how Ontario manages its private electricity generators”. The article said “gaming” of the system was discovered by the Ontario Energy Board (OEB) and contained this statement about the IESO: “the investigation found IESO did little checking into the details of Goreway Power Station’s billings.

Data not audited

That is somewhat disconcerting. When I recently asked IESO about the Fair Hydro Plan’s “variance account” for the month of May 2018 being very high ($309.9 million), they answered “Please note that settlement data submitted to the IESO by the LDCs is not audited by the IESO (audit responsibilities reside with the OEB) and is processed as submitted.”

In viewing IESO’s December 31, 2017 financial statements, their independent auditors (KPMG) attempt to capture their responsibilities, listing 30 of them as if they were simply the Ten Commandments. The one directing the activities associated with the money movement related to the FHP (Fair Hydro Plan) says: “engaging in activities related to making payments to and receiving payments as contemplated under the FHP and related settlement activities”.

The disconcerting part of this is that the Fair Hydro Plan alone will (according to the Financial Accountability Office of Ontario) amount to approximately $1,750 million on an annual basis — the 8% HST provincial rebate will add another $1 billion annually.  That certainly leaves the taxpayers and ratepayers of the future exposed to any one of the LDC “gaming” the system, or inadvertently submitting incorrect information.

Can we current and future ratepayers trust that Hydro One and all of the other LDC will submit correct “data” to IESO and that it will be properly audited by the Ontario Energy Board?

Stay tuned!

Second installment to appear tomorrow

Hydro One and “demonstrable consumer value”

Sorting out fact from fiction among Hydro One claims

The current media attention focusing on Hydro One and its executives is reminiscent of the not so distant past when Andre Marin was Ontario’s Ombudsman. In May 2015 an article in the Globe and Mail noted as a result of his report: “Hydro One issued faulty bills to more than 100,000 customers, lied to the government and regulators in a bid to cover up the problem, then spent $88.3-million in public funds to repair the damage.”

Hydro One installed Mayo Schmidt as CEO in 2015. Recent media reports have focused on why Mr. Schmidt was given a big raise ($1.7 million) to $6.2 million and how his termination (without cause) would cost $10.7 million. The current government signaled they were unaware of either the pay increases for the executives or the increased termination amount and the raises the Board of Directors gave themselves.

These issues were two of the items Hydro One’s Board of Directors had on the agenda for the Annual General Meeting (AGM) that required shareholder approval. As Andrew Willis of the Globe and Mail reported: “Shareholders voted 92 per cent in favour of Hydro One Ltd.’s executive compensation plan, which has faced intense scrutiny during the lead up to Ontario’s election campaign.” It appears that, of the shareholders who actually voted, only 8 per cent were against the increases.   But if the province had participated in the voting (they abstained) and used their 47 per cent shareholding, the motion could have been defeated with 55 per cent voting against it.

One wonders why they chose not to participate.

Christie Blatchford of the National Post was present at Hydro One’s AGM and took part in a short scrum after the AGM ended, with other reporters. The Chairman of the Board, David Denison, along with CEO. Mayo Schmidt represented Hydro One.  Blatchford’s article notes questioning from one aggressive reporter! Asked if he’d take a pay cut or resign, Schmidt said, “It isn’t about pay cuts.” The hellion reporter snapped, “Of course it is.” He then reminded the motley press that the company is committed to “building this high-performing champion,” that Hydro One has reduced costs by 31 per cent, and “turned the power back on for the desperate people.”

Now the only allusion Schmidt made to where those reduced costs came from at the AGM was reported by Andrew Willis who noted “management said the main drivers of earnings growth will come from consolidating local distribution companies in Ontario and cutting costs — the company got rid of 1,000 vehicles over the past year.”

While Schmidt (according to media coverage) was subdued and apolitical during the AGM, a couple of days later he lashed out as reported in the Globe and Mail’s Report on Business in an article by Tim Kiladze. Mr. Kiladze reported that “Schmidt is warning that threats from politicians in Ontario’s election campaign are weighing on the business and will have consequences.” Later in the article reporter Kiladze noted: “Speaking to Hydro One’s latest quarterly earnings, he noted that profit was up by 33 per cent from the year prior, and that Hydro One has added 400 jobs while delivering $114 million in cost savings since its IPO. “Those are remarkable statistics for a company that’s in transition,” Schmidt is reported to have said.

Despite Mr. Schmidt’s claim of improving profits and generating cost savings, the market has moved Hydro’s One’s stock price in the opposite direction. It reached a new low of $18.93 and closed the week at $19.10.   It appears investors are not impressed with either the quarterly earnings jump or the reported “cost savings.”

Examining the first Quarter report tells some of the story.

As CEO Schmidt noted, profit was up by 33 per cent or $55 million above the first quarter of 2017. It appears almost all of the increase was related to rate approvals for the transmission part of the business which increased $54 million due to rate increases approved by the regulator — the Ontario Energy Board (OEB). Electricity transmitted in the quarter was up by only one tenth of one per cent!

Go further into the quarterly report to Note 10, the possible reason for investor concern is significant and relates to the OEB’s Decision and Order in respect to the “transition from the payments in lieu of tax regime under the Electricity Act (Ontario) to tax payments under the federal and provincial tax regime”.

The following comes from that note: “On November 9, 2017, the OEB issued a Decision and Order that calculated the portion of the tax savings that should be shared with ratepayers. The OEB’s calculation would result in an impairment of Hydro One Networks’ transmission deferred income tax regulatory asset of up to approximately $515 million. If the OEB were to apply the same calculation for sharing in Hydro One Networks’ 2018-2022 distribution rates, for which a decision is currently outstanding, it would result in an additional impairment of up to approximately $370 million related to Hydro One Networks’ distribution deferred income tax regulatory asset.”

The conclusion from the OEB’s decision is that they were simply doing their job and honouring their first listed mission statement which reads: “Strengthening the focus on demonstrable consumer value during a period of sector evolution.”

The decision is being challenged by Hydro One’s executives and (presumably) their Board of Directors who are upset the $885 million may not wind up in shareholders pockets. As a result, in October 2017 the Company filed a Motion to Review and Vary (Motion) the Decision and filed an appeal with the Divisional Court of Ontario (Appeal). On December 19, 2017, the OEB granted a hearing of the merits of the Motion which was held on February 12, 2018.

In both cases, the Company’s position is that the OEB made errors of fact and law in its determination of allocation of the tax savings between the shareholders and ratepayers. To put the $885 million in context; it exceeds the annual after-tax profit of Hydro One for a full year!  The results of the OEB hearing will determine whether Hydro One proceed with the appeal to the Divisional Court of Ontario.

Perhaps Hydro One’s Board of Directors and senior executives don’t comprehend they operate a monopoly that is regulated for the express purpose of ensuring their focus is “on demonstrable consumer value during a period of sector evolution.”

As ratepayers, we should hope the OEB continues to place an emphasis on “demonstrable consumer value.” Ordinary ratepayers do not enjoy the benefits Hydro One’s executive have awarded themselves.

Parker Gallant

May 22, 2018

New info: energy poverty still deep in Ontario

It apparently took the Ontario Energy Board (OEB) a long time to put together the report on the low-income energy assistance program (LEAP) as the 2016 report was not posted until January 11, 2018.

(It was late:  OEB reporting regulations state “A distributor shall provide in the form and manner required by the Board, annually, by April 30, the following information related to the provision of LEAP emergency financial assistance in the preceding calendar year.”)

Actually, I looked for the reports for both the LEAP program and the OESP (Ontario Electricity Support Program) back in mid-December 2017, and still have not received a response.  Busy times at the OEB? Or is the release of the OESP report being delayed for some reason?

The LEAP report is just what we have come to expect. The leader by a wide margin in terms of the program, was Hydro One, which represented 52.4% of all recipients, despite only having about 25% of all residential ratepayers as clients. The dollar values from Hydro One also represented 57.4% of total available funds and 60.7% of total grants disbursed.   Hydro One’s budget was only $1,845,000 (41% of the CEO’s annual remuneration), but it had to be supplemented via donations of $2,250,000 from numerous corporate donors and social agencies.

Thirty-nine (39) LDC depleted their funds in 2016 and 12 more had less than the average grant amount available at year-end. Almost half of the LDC had run out of funds by the time summer arrived in June 2016.

Funds disbursed under the LEAP and Winter Warmth programs compared to 2015 increased in 2016 by $1,318,700 to $7,776,600 (up 20%) despite the fact the OESP (Ontario Electricity Support Program) started January 1, 2016 and offered significant relief to hundreds of thousands of low-income Ontarians. The OESP was estimated by the OEB to cost other ratepayers as much as $200 million annually.

It certainly appears “energy poverty” continues to increase in the province despite the recent claim by the Minister of Economic Development and Growth that “Ontario has now created more than 800,000 net new jobs since the depths of the recession.”

The assumption must be, those 800,000 jobs are all at the low end of the pay scale — otherwise there would have been no need to kick $25 billion (plus the interest [$15 billion]on the borrowed funds) of ratepayer bills down the road for future generation to pay.

Parker Gallant

 

 

Energy poverty in Ontario: the data reveals a sad situation

Yesterday, I dealt with the government’s apparent interest in “energy poverty” and specifically noted a consumer survey currently being used by the OEB in an attempt to define how local distribution companies should deal with payments for accounts in arrears.

When the government released its Economic and Fiscal Review 2017: A Strong and Fair Ontario in November, the minister claimed, “Our plan is working. There are now more jobs in Ontario than ever before —more than 800,000 net new jobs since the depth of the recession”.

Impressive: but did those “800,000 net new jobs” have any effect on reducing Ontario’s energy poverty?

The statistics betray a sad situation for Ontario citizens struggling to pay power bills. Two weeks after the launch of the OEB survey and two months before the 2017 Fiscal Review, an interesting 29-page report appeared on OEB’s website.  Named “Data reported to the Ontario Energy Board by Electricity Distributors” it was full of bad news for the period from 2013 to the end of 2016.

The bad news included the number of ratepayers who had been disconnected, the accounts in arrears (up 85,141 or 27.7% since 2013,) and the amount of arrears at year-end. It included customers with “arrears payment agreements,” the amount of those and those cancelled (up 96.4% since 2013). It has data on write-offs, accounts enrolled in equal or monthly payment plans, etc. etc.  It also has data on security deposits, customers with “load limiting devices,” those with “timed load interrupter devices,” the number of “eligible low-income customers” (Hydro One’s increased by 520% since 2013), and those disconnected for nonpayment (up 180% since 2013), etc. etc.

New jobs? No effect on poverty

Based on the “data” in the report (kept under wraps by the OEB), it certainly appears the economic policies of the government may have created “800,000 net new jobs” but it hasn’t done much to counteract “energy poverty” — that has escalated since 2013.

It’s also unclear why the OEB didn’t issue a press release in respect to the data. My queries to them about the 2016 results of the OESP (Ontario Energy Support Program) and LEAP (Low-income Energy Assistance Program) also remain unanswered.

It appears the government has ignored facts and focused attention instead on more spending to make people believe they can have more “free” stuff.  The August launch of the Green Ontario Fund was one such event; the government plans to “invest” $377 million in proceeds from its carbon market to establish the fund.

The minister was quoted in the press release: “Taking strong action on climate change means making it as easy as possible for people and businesses to reduce greenhouse gas emissions at home and work, while also saving money.

Programs (rebates) offered via the “Green Ontario Fund” can be in the tens of thousands of dollars, but the homeowner or small business owner must have funds of an almost equal amount and must work with a “qualified” contractor.   One should assume those who have fallen in arrears on their hydro bills don’t have the cash required to insulate their home or install a heat pump to save money, or they would have been able to pay their monthly energy bill. The $377 million in cap and trade dollars will clearly be handed out to only those who can afford to spend to reduce emissions.

No comment on the strain on Ontario families

There was no commentary associated with the OEB’s data so there is no discussion of the strain put on family members, food banks, charitable institutions and churches called on to help pay hydro bills.

One wonders how much those individuals and institutions helped by way of paying electricity bills and if the contributions exceeded the “write-offs” ($50.9 million in 2016) by the local distribution companies? One also wonders how many single parent families, seniors, disabled, etc. are living in freezing homes or apartments trying to keep their electricity bills at affordable levels?  The recent record low temperatures throughout the province will surely exacerbate the problems associated with their electricity bills being experienced by so many caused by the government’s energy policies.

That $377 million the government is spending could have gone a long way to alleviate the true cost of the Green Energy Act, as could the approximately $400 million paid to corporate wind power developers in 2017 for power they didn’t produce (it was “curtailed” or not added to the grid, but paid for).

I hope the people occupying those 800,000 new jobs are doing their part in generously donating to the charities, food banks, churches, etc. to keep Ontarians living in “energy poverty” warm and fed!

(C) Parker Gallant

NB: You can find out how your LDC is doing in respect to “energy poverty” by reviewing the OEB data report.  Link is here:  https://www.oeb.ca/sites/default/files/2013–2016-disconnection-late-payment%20data-by-utility_20170921.pdf

 

Ontario and energy poverty: addressing it at last?

Almost every day, it seems, the Ontario government must publish a press release announcing the wonders of what the government does for its citizens.

The press release of December 28, 2017 was typical, listing “free” stuff the government had announced over the past year. It referred to minimum wage increases, free tuition, free prescription drugs, etc.

Strangely, there was no mention of the Fair Hydro Plan or electricity in general, the issue that is/was top of mind by most voters in the province.

The December 28 release carried a quote from the Premier on how government is making life “fairer.”   

“As Premier, the most important part of my job is listening to the people of Ontario. When we make changes to legislation and regulations, it’s about responding to real concerns from people in every corner of our province. And it’s all part of our work to make Ontario a fairer and better place to live. We want to make sure that everyone has the opportunity to get ahead in this changing economy.”

 Electricity may not have been mentioned expressly but a lot is happening on that file that will affect Ontario’s ratepayers, in addition to kicking the costs of the Fair Hydro Plan down the road.

The Ontario Energy Board (OEB) appears to be the epicenter: the OEB recently announced it is establishing a “panel” to review how the OEB “can continue to protect consumers”.  The panel won’t report until next year, well after the election date of June 7, 2018.

The OEB’s survey on service rules, or dealing with “energy poverty”

The launch of the OEB panel was preceded by announcement of a survey by the OEB on September 7, 2017 to deal with why many ratepayers are unable to pay their electricity bills. The OEB explained why in a press release 

“Are there any times when Ontario energy utilities shouldn’t be allowed to disconnect customers? How much time should customers be given to pay and should they be allowed to use credit cards? Should energy utilities be allowed to ask for security deposits?”

A web search using the press release’s heading, “Public asked for input on customer service rules for Ontario energy utilities” indicates the survey received no media attention.  Nothing on the OEB site indicates local distribution companies (LDC) were told to notify their ratepaying customers about the survey.  How will this survey receive a broad and “fair” response? The survey results will be provided by pollster Ipsos to the OEB.   The survey is copyrighted so you cannot copy/paste any of the material provided or the questions asked without permission.  What happened to the transparency we were promised?

The survey will supposedly inform the OEB on how to treat ratepayers caught in the “heat or eat/energy poverty” scenario.* The survey asks for responses on “arrears payment arrangements” e.g.,  how long it should allow for repayment, whether late payment charges should apply, etc.  It asks, how long notice should be given for “disconnection” and if “load limiting devices” should be allowed, if utilities should offer equal monthly payment plans and if security deposits should be required, etc.  The survey appears to want a consensus allowing the OEB to set terms and conditions on how households living in energy poverty are to be treated.

No questions ask about pre-paid meters, but that idea is part of the Hydro One application submission for a rate increase currently before the OEB.

Tomorrow: why the sudden interest in how best to treat those living in Energy Poverty.

 

Parker Gallant

 

* Energy Poverty is generally defined as spending 10% of household income on heat and utilities: From Huffington Post “ In Ontario, at least one in five households fall into this category spending on average 12 per cent of their income on utilities