Proposal heralds significant hydro rates for seasonals

By Raysonho @ Open Grid Scheduler / Grid Engine (Own work) [CC0], via Wikimedia Commons

ONTARIO – If the Ontario Energy Board (OEB) decides to order Hydro One to eliminate the seasonal rate for customers with cottages and camps it would mean that in areas like Manitoulin Island, some cottagers will be faced with a significant increase in their Hydro One charges per year.

“My understanding is the Ontario Energy Board intends to order Hydro One to eliminate the ‘seasonal rate’ for customers with cottages, camps, etc,” Tom Imrie, a Gore Bay resident told the Recorder in a recent email. “This effect will be much higher monthly costs per customer for seasonal dwellings, as the cost for delivery will no longer be shared by the customers on one local power grid.”

Algoma-Manitoulin MPP Michael Mantha said, “when I first heard of this proposal red flags went off in my mind; it is quite concerning. The OEB proposal would mean removing the seasonal classification into one of three other classes, based on the population density of the area, and the infrastructure and equipment costs that come with delivering electricity. And it would mean those affected would see on average an increase in hydro rates of $1,000 per year, and for some the increase might be more. I understand there has been a counter proposal from Hydro One to do incremental increases to a fixed rate.”

Terry Rees, executive director of the Ontario Cottagers Association (OCA), told the Recorder on Tuesday, “there are a lot of people in Ontario who are concerned about all of this, including us.” He pointed to some more bad news for all Hydro One users, not just for seasonal customers. “The rates are going up period. They are already phasing in fixed rate increases for all customers, just for the privilege of being connected with Hydro One for power. And this is the third year of a 10-year phase in period.”

“On the order by OEB that eliminates the seasonal rates, this will affect 150,000 odd seasonal customers, including no doubt many on Manitoulin Island,” said Mr. Rees. He explained that four years ago the original decision was made by Hydro One calling for the elimination of the seasonal rates. “Then this year, the OEB told Hydro One ‘remember when we told you to eliminate the seasonal rate. Well, now do it.’ And this summer Hydro One provided a report back to OEB indicating what is going to happen if the seasonal class is cancelled, and this is what is going to happen to these customers if their rates are increased. For instance, about 80,000 customers in rural areas will see their rates increase by about $120 per month.”

“If you are a (Hydro One) customer in an area with less than 100 customers on a hydro line, you will see an increase of about $1,000 a year with this proposal,” said Mr. Rees. He pointed out that in their submission to the OEB, Hydro One outlined how these customers are going to be seriously impacted. 

“Ontario Hydro (Hydro One) proposed an alternative that would mean these increases would not be felt. They pointed out all hydro customer rates are increasing already; without eliminating the seasonal rates,” said Mr. Rees. “Hydro, knowing that seasonal would be affected by eliminating the seasonal rate, requested the OEB to let the phase in period run its course.” 

However, “last week the OEB told Hydro that they hadn’t asked for this, we’ll call it option C from Hydro,” said Mr. Rees. “They told Hydro One to fill out a report explaining this rational and why they are proposing this, and to have this in by October 1. Once the OEB receives this information they will probably make their final decision later this fall.”

The CBC News reported August 19 that electricity rates for seasonal customers are set to rise by as much as 129 percent. The OEB tasked Hydro One with developing a billing model that would eliminate the class under which most seasonal customers have their hydro fees associated. In a letter to customers last week, the electricity provider warned that if the OEB eliminates the seasonal rate class, hydro bills would rise for more than half of them.

Hydro One sent its official analysis of the proposal to the OEB on July 19. The OEB is issuing public notice of hearings into the proposed elimination of the seasonal class.

“Unfortunately there are families that we deal with, some on Manitoulin Island that can’t take another hit like this and this may be the straw that breaks the camels back for them owning a seasonal cottage or camp,” added Mr. Rees.