Well here is one issue that has folks riled up and rightly so. While some pundits blame the Liberals for the mess that is our electricity situation in Ontario, I must say that I am not sure the Conservatives would have been a lot better at managing this file. Remember Mike Harris was the chap that blew up Ontario Hydro so we could have 5 bureaucracies where we used to have one. And could privatize large parts of the organization, which never happened on his watch. So while the Liberals have shown incredible ineptitude on the Electricity file, it doesn’t follow that the Conservatives would have been better.
But it would be hard to be worse.
I work with a waterfront coalition that tackled the latest Hydro One Networks (H1N) rate application which was for 5 years. Never been requested before; two years was the previous limit. It started with a 3000 page rate request in December 2013. We finally got an answer from the Ontario Energy Board in March 2015.
Our group, the Balsam Lake Coalition (BLC) has what is called “intervenor status”. That means we get to make our case before the Ontario Energy Board (OEB) hearings. There are about 30 intervenors for this aspect of Hydro One’s business, primarily big commercial and industrial associations but also municipalities and consumer groups. The OEB is the provincial government agency that approves regulated energy rates. Our group was making the case for Seasonal customers to be treated the same as their neighbours when it comes to the distribution costs for electricity, not the actual cost of the power. For decades they have had their own rate structure and it wasn’t at all rational; same poles and wires, different pricing scheme if you were called Seasonal instead of Residential.
Well we won our case with the March decision. The OEB has decided that starting in 2016 Seasonals must be included in the same rate structure along with residential folks. Here is how the OEB put it. “The OEB finds the arguments of BLC to be persuasive. Hydro One has developed the technical capability to implement and maintain density-based rates for its non-seasonal residential classes. The OEB requires Hydro One to bring forward a plan for the elimination of the seasonal class.”
Well you would think we would be doing cartwheels..after over a year of hearings at the OEB, they have agreed to correct a longstanding inequity that we fought for.
Not so fast.
Firstly there is another related inequity which needs correction and that is a little known piece of legislation called RURAL OR REMOTE ELECTRICITY RATE PROTECTION (Reg 442/01). In a nutshell this gives about $3600 pre year of relief on electricity distribution costs to a select group of customers who get their electricity from Hydro One Networks or Algoma Power. It is a carryover from the old Ontario Hydro days. And Hydro One has been adamant that it not be applied to Seasonals.
Secondly , the OEB in its wisdom, has now decided that all residential classes will pay a fixed rate for electricity delivery instead of the old system of rates which used geographic density (fixed rate) as well as consumption (volume rate). This will have the effect of dramatically increasing the costs of electricity delivery for waterfront owners who use their property primarily in the summer months. And the OEB intend to start implementing this new pricing scheme for 2016. They claim to have done “consultations” but we at the BLC aren’t sure who they talked to.
What will this mean for you? Check your bill for last year, and if you consumed less than 10,000 KWH you should expect a hefty increase if this new plan comes into effect. The lower your consumption the more the increase will be. Thinking of disconnecting for the winter months? Stay tuned as Hydro One has many ways to make you pay.
What is saddest about all of the above? Well none of it does anything to control the cost increases which Hydro One is so good at ramming through, or tackles cost comparisons with other electricity distributors, productivity, innovation for cost savings ,elimination of waste etc.
Certainly , as they have in the past rate applications, the OEB has pleaded with Hydro One to do some more “studies” of how it can get more efficient. “The OEB does not believe that Hydro One’s plan contains adequate efficiency incentives to drive year-over-year continuous improvement in the company. Furthermore, the plan lacks measurement of increased efficiency year-over-year in a form illustrating trends in a transparent fashion.”
The OEB solution? “The OEB sees value in Hydro One measuring its own total factor productivity over time to be able to demonstrate improvement in productivity to its customers and the OEB. The OEB requires Hydro One to conduct such a study.” Studies seem to be the as far as the OEB is prepared to push this utility.
Overall, its not a pretty picture. And remember that this is only a small part of the overall Electricity package which includes generation, transmission and supply/demand planning. And we all know the ineptitude shown in these areas is in the billions of dollars.
The OEB says consumers need more incentive to conserve electricity. They are dead wrong.
I haven’t talked to anyone recently who is not desperate to find a way to be less reliant on Hydro One for energy.
Well, in the private sector , if you cant figure out how to run your business, you try selling it to unwary investors. We have all seen examples of firms privately owned where the owners all of sudden decided to reduce their stake and let others share if the fruits of the organization. That is what the Wynne government is planning for Hydro One.
Be very wary
Bill Cheshire
Baptiste Lake