UPDATE December 12, 2016 – Hydro One has filed an updated plan related to the Ontario Energy Board (OEB) order to eliminate the Seasonal rate class. The full 196-page report is linked from the OEB website and is entitled: HONI_SeasonalRateReport_UPDATE_20161202
Some highlights include:
- The elimination of the Seasonal Class will result in over 70,000 customers moving to the R1 class and close to 84,000 customers moving to the R2 class, a large majority of whom are low-consumption customers.
- Hydro One’s detailed analysis demonstrates that the move to all-fixed rates alone (already underway) addresses the key concern of some customers that low consumption customers are not paying their fair share of costs.
- The analysis also demonstrates that from a customer’s perspective, very little incremental benefit is gained by the elimination of the Seasonal Class. The elimination of the Seasonal Class combined with the move to all-fixed distribution residential rates results in only a small benefit to the 70,000 seasonal customers moving to the R1 class, and very large negative impacts on the 84,000 seasonal customers that would move to the R2 class.
- Seasonal customers moving to all-fixed R1 rates will see only a small benefit from the elimination of the Seasonal Class s (i.e. a reduction of $7 to $9 in their bill)
- Seasonal customers moving to all-fixed R2 rates will see large unfavourable impacts from the elimination of the Seasonal Class (i.e. an increase of about $65 in their monthly bill).
In particular, low consumption seasonal customers will see a 177% increase in their monthly bill if they move to the R2 class with an all-fixed rate.
Note: About 46% or 70,000 seasonal customers consume less than 150 kWh/month on average over the year.
FOCA will be intervening in these OEB proceedings on behalf of our customers, and will be advising our members ASAP how they can productively contribute their ideas about their pending electricity bills. Read more about FOCA’s concerns, below.
November 3, 2016 – The Ontario Energy Board (OEB) has issued a Notice (OEB 2016-0315 – PDF; 4 pages) requiring an updated plan from Hydro One regarding the elimination of the seasonal customer class. The OEB will require Hydro One to file a report no later than December 1, 2016 which will include rate and bill impacts of this change compared to:
- the current Hydro One 2016 distribution rates
- an estimated Hydro One 2017 rate (with the second step to fixed residential rates and the increase in Rural or Remote Rate Protection (RRRP) funding for R2 customers included)
Hydro One will also report on the impacts of:
- the move to all fixed rates
- elimination of the seasonal class
- a proposed plan to mitigation the rate impacts that are in excess of 10% for seasonal customers migrating to each of the other (UR, R1 or R2) customer classes
- the potential rate impact on all customer classes, including any mitigation costs, associated with the elimination of the seasonal class.
October 2016 – updates announced for Ontario electricity pricing will affect FOCA members, many of whom are classed as seasonal or rural customers. FOCA’s position on these changes:
FOCA is gravely concerned about the unrelenting increases in electrical costs for our community. In addition to electricity costs, rural homeowners already shoulder 90% of the property tax burden in some rural municipalities! Waterfront property owners represent a significant proportion of many rural communities, and support local economic activity through their taxes, local purchases, volunteerism and other forms of community leadership.
Details of the announced electricity pricing changes are explained below.
2017 Electricity Costs: Distribution costs on the move, kwH charges staying flat
For the first time in eight years, electricity rates per kwH in Ontario will not rise on November 1, 2016. Ontario electricity customers will continue paying the same rates they’ve had since last May, until May 2017, namely:
- 18.0 cents/kwH Peak rate (7:00 a.m. to 11:00 a.m. and 5:00 p.m. to 7:00 p.m. weekdays)
- 13.2 cents/kwH Mid-peak (11:00 a.m. until 5:00 p.m. weekdays)
- 8.7 cents/kwH Off-Peak (7:00 p.m. to 7:00 a.m. weekdays and all day weekends and holidays)
The Ontario Energy Board sets rates for customers on time-of-use pricing every May and November, when it also changes the hours for peak and off-peak rates.
Distribution rates however, will be changing
Hydro One recently released the Draft Rate Order which spells out the allocation of costs for Hydro One customers beginning January 1, 2017. FOCA members will recall (https://foca.on.ca/decision-on-hydro-ones-2015-2019-distribution-rates-application/) that distribution rates were already set for 2015 to 2019. The purpose of the most recent (October 7, 2016) rate proposal from Hydro One is to spell out the implications of recent announcements from the Provincial government with respect to HST reductions, and rebates for certain rural customers.
The Province of Ontario announced their interventions in the marketplace Ontario Rebate for Electricity Consumers Act, 2016 on October 19, 2016, yet have not been forthcoming on how the costs associated with this initiative will be borne by other electricity ratepayers. (See: October 14, 2016 – Ontario energy minister refuses to release data on rural electricity rates– Global News)
The new rural rate relief will serve to increase the Rural Rate Protection Plan (RRRP) subsidy from $31.50/month to $58.90/month. This subsidy is available only to year-round residential customers in R2 zones, and will be paid for by all other customers in R1, Seasonal & UR classes. This should mean the annual charges (incl. RRRP) for R2 customers are reduced from $496.32 to $261.60 (or by approx. 40%), while R1, Seasonal & UR res. customers will shoulder an annual SC increase.