September 17, 2020 – OEB orders Hydro One to eliminate the Seasonal Rate Class – The OEB ruled today that Hydro One will eliminate the Seasonal Rate Class, and shall move all customers into one of their other, density-based rate classes.
As part of the deliberation, OEB staff had argued that the incremental benefits of the elimination of the seasonal class are minimal at best, while incremental adverse impacts on certain customers will be significant. This has been a main focus of FOCA’s objection to this change for many years.
However, in the latest review, the OEB states that “…the submissions of the parties (including FOCA) generally focused more on the bill impacts that would flow from the elimination of the seasonal class… The fact that there are impacts associated with the elimination of the seasonal class does not render the decision to eliminate the class incorrect.”
OEB also noted that Rural or Remote Rate Protection (RRRP) and Distribution Rate Protection (DRP) subsidies exclude seasonal customers who are joining the other existing residential rate classes, since the program is restricted to customers that reside continuously at the service address for at least 8 months of the year. The OEB does not and cannot factor provincial programs such as the RRRP/DRP into rate design as the OEB does not determine how, when or which customers are eligible to receive them.
Recognizing the significant impacts to low use seasonals being reclassified to R2 (Low Density), the OEB has previously stated that any plan to eliminate the seasonal rate class should include a phase-in period for those customers expected to experience a total bill impact of greater than 10% as a result of migrating to another class. There is not word as yet how or if such mitigation will be applied, and this will be the subject of Hydro One’s next rate submission.
Next steps: Hydro One will be filing an updated report on the elimination of the seasonal class by October 15, 2020.
See more background on the issue of the Seasonal Class, below.
FOCA will continue to post updates here, and report on them in the monthly Elert (e-newsletter). Ensure you are subscribed, to receive updates.
Other Recent Electricity News:
August 2020 – A recently released report provided by the Independent Electricity System Operator to Energy Minister Greg Rickford says that there are limited opportunities for the government to achieve significant cost savings from existing power generation contracts. This, despite repeated government calls for the industry to provide its best advice to lower prices for ratepayers, and an outstanding government promise to lower hydro rates by 12 per cent.
August 2020 – A renewed Long Term Energy Plan (LTEP), due out this fall, will be reflective of the rate relief granted to electricity consumers during the pandemic, particularly in adjusting rates for Ontarians working at home and the higher demands coming from small businesses, farms and major industrial players, according to Energy Minister Minister Greg Rickford at AMO 2020. This commitment comes just a month after the Ontario government sought to revoke Ontario Regulation 355/17 which requires Ontario to release the next LTEP by February 2021. (Aird & Berlis)
Electricity: what FOCA sees
FOCA is 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.
Waterfront property owners represent a major electricity customer group (mostly Hydro One customers) in various rate classes. FOCA members are concerned about rising electrical rates, disparity in rate classes, power outages, and business practices by electricity providers regarding forestry management and use of pesticides, as well as invasive species prevention.
On behalf of our members, FOCA has participated in the Ontario Energy Board (OEB) hearings as an intervenor for over 20 years. FOCA continues to seek a just and reasonable allocation of costs, among and within the rate classes, as we have members in all these groups. FOCA has been working on this file for many years; see details and background below.
More About the Seasonal Rate Class
August 13, 2019 – Hydro One has distributed an email letter to their Seasonal Customers, related to the Ontario Energy Board’s proposal to eliminate the Seasonal rate class. Read the letter (PDF). FOCA expects the OEB to issue a decision on this matter very soon. As we have done in the past, FOCA will be advising our members of the ruling, and will be undertaking whatever opportunity is available to intervene with the OEB to represent the interests of our members.
Get more information, including ways to contact Hydro One’s customer service with your questions, here: https://www.hydroone.com/about/regulatory/oeb-applications/seasonal-rates
In July 2019, Hydro One introduced new delivery rates for 2018 and 2019 that applied to usage starting on July 1, 2019. See copies of the notices for seasonal, rural and urban customer classes. Interested customers are encouraged to login to their Hydro One account at: https://www.hydroone.com/login?EC= to see your billing and payment history, and copies of online bills which include a description of which customer class you are in.
Click here for an EXAMPLE BILL showing where to find your customer class on your bill.
Ongoing changes to electricity delivery rates include the phase-in of “fixed” delivery charges for all customers. Low use customers will notice possibly significant increases in distribution rates; high use customers will see an overall bill reduction. Learn more here: https://www.hydroone.com/rates-and-billing/rates-and-charges/fixed-distribution-rates
Back in 2017, Hydro One had confirmed to FOCA that the elimination of the ‘seasonal’ class would mean that up to 84,000 ‘seasonal’ customers would see bill increases of over 100%:
In December 2016, Hydro One 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 (at 2016) included:
- 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 would 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.
Earlier and other Electricity News:
May 30, 2020 – Ontario is extending its COVID-19 residential electricity rate relief for another five months. The fixed price will be higher, going from 10.1 cents per kilowatt hour to 12.8 cents per kilowatt hour, regardless of the time of day. The province says the changes will be effective June 1 and last until Oct. 31.
May 24, 2020 – This is how much Ontario’s COVID-19 electricity price freeze cost (Sudbury.com)
March 24, 2020 – Ontario to slash hydro rates to offset costs of working from home amid coronavirus pandemic (Globe and Mail)
March 12, 2020 – The OEB issued its Decision and Order with respect to the motion to reconsider the elimination of Hydro One’s Seasonal rate classes. The decision is here. OEB comment: “Further direction with respect to next steps…will be given in due course.”
December 18, 2019 – As an intervenor with the Ontario Energy Board (OEB), FOCA submitted an Interrogatory Motion in support of Hydro One’s October 2019 proposal NOT to eliminate the Seasonal Class of electricity customers. Download FOCA’s submission (PDF, 5 pages) which included letters of support from three of our largest regional partners: Lake of the Woods District Stewardship Association, Lake of Bays Association and the Georgian Bay Association.
November 28, 2019 – OEB has responded to the Hydro One Motion of Change, and today issued its Procedural Order No. 1 for the Elimination of Seasonal Rates (Motion – OEB File No. EB-2019-0234). OEB intervenors (including FOCA) can file submissions with the OEB by December 19, 2019.
October 1, 2019 – Hydro One, at the request of the Ontario Energy Board (OEB) has submitted a “Motion of Change,” recommending AGAINST the elimination of the Seasonal Class of customer. The Hydro One argument is primarily based on the fact that the ongoing shift to all-fixed distribution rates will mean both low and high volume customers will be paying an equal and fair share of their costs. (Note: The OEB decision that all-fixed distribution rates would apply to Seasonal customers was rendered September 30, 2015.)
September 17, 2019 – the Ontario Energy Board has issued an order related to the matter of eliminating the Seasonal Class of customer, by asking Hydro One to file an additional, separate motion. FOCA has learned that Hydro One is proceeding, in order to articulate their “alternative approach” which would not eliminate the Seasonal customer class. FOCA expects this alternative will largely be based on the existing and ongoing phase-in of fixed delivery costs for low density customers (already underway) which should deal with the “paying what it costs to serve you” issues of the OEB. This approach could avoid most of the significant bill impacts that will result if a customer is changed from “Seasonal” to “R2” (low density). Read the notice from OEB (↓PDF, 6 pages), directing Hydro One to come back with more information by October 1, 2019.
Note that FOCA will be part of any public or intervenor comment opportunity, and will advise our members of the ongoing status of this important file.
February 19, 2020 – Seasonal Cottagers Could See Huge Increase in Electricity Costs (The Bay Muskoka)
September 27, 2019 – Proposal heralds significant hydro rates for seasonals (Manitoulin Expositor)
August 21, 2019 – Hydro One fighting to keep seasonal rate class for Ontario cottagers (Durham Radio News)
August 21, 2019 – Pending changes to electricity rates for cottagers (CBC Ontario Morning; audio starts at 15:42 of podcast)
August 20, 2019 – Electricity rates for some Ontario cottagers could jump if plan goes ahead, Hydro One says (Toronto Star, CP)
August 20, 2019 – Hydro rates could jump in Ontario’s cottage country (CTV News, CP)
August 20, 2019 – Cottage hydro rates could jump: Hydro One (Ottawa Citizen, CP)
August 20, 2019 – Cottage hydro rates would skyrocket under Ontario Energy Board plan (TBNewswatch)
August 19, 2019 – Cottagers brace for ‘disastrous’ jump in electricity costs (CBC Ottawa)
July 16, 2019 – 570 News Radio – Mike Farwell interviews Terry Rees about hydro pricing (jump to 108:20 on the recording for Terry’s interview)
July 15 – Global News Radio – Scott Thompson Show interviews Terry Rees about hydro pricing (the link should take you directly to Terry’s section, at minute 34:00 of the full podcast)
July 12 – Global News: “Ontario cottagers may see a hydro hike soon” including video interview with FOCA’s Executive Director Terry Rees. (> click image to be taken to the Global website to view the video)
July 12 – 640 News Radio: Terry Rees interviewed by Kelly Cutrara on the subject of hydro rates.
July 11 (updated) – Cottage Life: “Your hydro bill is going up. Ouch!”
July 4 – My Muskoka Now: “Cottagers to see higher electric bills”
May 21, 2018 – Hydro sparks election debate, but parties’ promises don’t add up (Toronto Star)
May 18, 2018 – Sound bytes and witch hunts won’t quell hydro anger (Waterloo Record)
May 18, 2018 – Plugging Away at Ontario’s Hydro Issues (TVO)
May 15, 2018 – Hydro rates should be subsidized. Borrowing now ensures future capacity (Jatin Nathwani, Toronto Star – Opinion)
April 10, 2018 – WEBINAR: Making Connections: Straight Talk About Electricity in Ontario Highlights from the 2018 Energy Conservation Progress Report, Volume One (Environmental Commissioner of Ontario)
November 2017 – OEB Electricity Rate Comparison
October 26, 2017 – Your hydro bill will go up, whatever the government says (TVO)
“New energy plan may predict lower prices — but it assumes lower consumption”
October 26, 2017 – Ontario’s 2017 Long Tern Energy Plan
October 17, 2017 – Auditor General Says Provincial Government Plans to Obscure the Financial Impact of Electricity Rate Cuts
“In a Special Report, the Auditor General says the government created an unnecessary, complex financing structure to keep the true financial impact of most of its 25% electricity-rate reduction off the Province’s books—a decision that could cost Ontarians up to $4 billion more than necessary in interest costs over the next 30 years.”
June 12, 2017 – No hydro discounts for cottagers and seasonal residents: Province (Independent Free Press)
June 7, 2017 – Customers stunned Hydro One asking for rate increase (CBC News)
June 6, 2017 – Premier Wynne must deny Hydro One proposal to increase distribution rates: Brown (Toronto Sun)
June 4, 2017 – Hydro One Networks Inc. has applied to the Ontario Energy Board to increase electricity distribution rates. Increases for a typical residential customer are expected to be between $2 and $3 per month each year starting in 2018 through 2022. This proposed increase is subject to Ontario Energy Board rate application EB 2017-0049.
May 31, 2017 – Ontario Passes Fair Hydro Act, 2017 (Government of Ontario)
May 25, 2017 – Wynne defends 25% hydro rate cut (Toronto Star)
May 24, 2017 – Ontario’s hydro plan will cost $21 billion more than it saves — it’s terrible public policy (Ottawa Citizen)
May 24, 2017 – Hydro rate-cut will ultimately cost $21B, watchdog warns (Toronto Star)
May 22, 2017 – Electricity policy: What went wrong in Ontario (Globe and Mail)
May 17, 2017 – Liberals violated spirit of ad rules with hydro bill inserts: A-G (Toronto Sun)
May 15, 2017 – Legislation Introduced to Implement Ontario’s “Fair Hydro Plan” -note the new legislation does not define if “electricity rates” in this context will include both commodity and distribution costs (Lexology)
May 12, 2017 – Ontario NDP call for budget watchdog to examine leaked Liberal cabinet hydro documents (Global News)
May 11, 2017 – Bill 132: Ontario’s Fair Hydro Act, 2017
May 11, 2017 – Ontarians will face hydro-bill shock after short-term relief, PCs say (Globe and Mail)
April 5, 2017 – How Ontario can end the cycle of meddling in electricity markets(Globe and Mail)
April 2017 – FOCA’s Terry Rees is quoted in a new article about electricity pricing titled “Power struggles,” in the May 2017 edition of Cottage Life Magazine. Says Terry:
“It should be either RRRP for everybody, or lower rates all round.” Otherwise, he says, distribution costs will reduce cottagers’ “ability to maintain their properties.”
April 2017 – read this CBC News item about cottage owners and electricity distribution rates
April 5, 2017 – How Ontario can end the cycle of meddling in electricity markets(Globe and Mail)
March 17, 2017 – Liberals’ ‘self-congratulatory’ hydro ads ripped by Auditor General, Opposition (Ottawa Sun)
March 15, 2017 – Hydro Announcement Pushes More Voters into Undecided Column (Mainstream)
March 8, 2017 – NDP hydro plan gives money to citizens, not banks: Horwath(Toronto Star)
March 7, 2017 – Reducing hydro bills the fairer way forward: Wynne (Toronto Star)
March 6, 2017 – Cottage owners cut off from Kathleen Wynne’s hydro bill slash(CBC)
March 6, 2017 – Outrage not justified on Ontario electricity prices (TVO)
March 3, 2017 – Rural electricity customers wary of Ontario’s rate cuts (CBC)
March 3, 2017 – Ontario Liberals hope hydro plan will douse voter anger (CBC)
March 2, 2017 – Ontario Cutting Electricity Bills by 25 Per Cent (Government of Ontario)
March 2017 – FOCA writes again about energy cost concerns – read the media release about FOCA’s March 2017 letter to Premier Wynne
February 2017 – read the media release about FOCA’s February letter to Premier Wynne, protesting rising energy costs
Will Kathleen Wynne’s last-ditch hydro fix just add to the mess? (Globe and Mail)
Generations will pay for Liberals’ hydro blunders (Toronto Sun)
Ontario hydro bill reductions to ultimately cost ratepayers more (Canadian Press)
Ontario’s plan to slash hydro rates to cost billions in long term (Globe and Mail)
Hydro rate increases will be held to inflation after 25% cut (Toronto Star)
March 1, 2017 – Our hydro hysteria generates hydro hypocrisy (Toronto Star)
February 28, 2017 – NDP has a big, bold, bad plan to cut Ontario’s electricity prices (Ottawa Citizen)
February 28, 2017 – Ontario opposition parties spar over NDP plan to reduce hydro rates (CBC)
February 27, 2017 – NDP Hydro plan doesn’t target real reason for rising prices (Green Party of Ontario)
February 27, 2017 – NDP Leader Horwath says she can cut hydro bills up to 30 per cent (Toronto Star)
February 24, 2017 – Energy minister Glenn Thibeault admits Ontario messed up on hydro rates with bad decisions (Toronto Star)
February 23, 2017 – No one can make electricity cheap again (Toronto Star)
February 22, 2017 – Hydro: Ontario pulls the plug on winter disconnects (Global News)
February 16, 2017 – High cost of hydro hot topic for Tory leader (North Bay Nugget)
February 16, 2017 – Brown dealing in ‘alternative facts’ — Thibeault (North Bay Nugget)
February 16, 2017 – Ontario energy minister asks utilities to stop winter hydro disconnections (Toronto Star)
February 15, 2017 – PC leader Brown touring northern Ontario, targets skyrocketing hydro rates (CBC)
February 14, 2017 – Ontario Liberals eyeing hydro rate cut in the range of 8 per cent: sources (CBC News)
Feb 12, 2017- Ontario energy minister talks hydro costs during stop in Port Hope
January 24, 2017 – Premier to tackle the sky-high electricity delivery charges (CBC)
January 23, 2017- To fix high electricity prices, we need to tell the truth (Loonie Politics)
November 23, 2016 – Aside from the incessant warnings, Ontario’s hydro crisis clearly came out of nowhere (CBC)
November 22, 2016 – No turning back the clock on energy policy (TVO)
November 2016 – Ontario’s Long Term Energy Plan at risk of missing the mark(Assoc. of Power Producers of Ontario – APPRO)
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 11, 2016 – Hydro One to revamp customer service after outrage over electricity prices (Financial Post )
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.
September 28, 2016 – Half of Ontario voters feel unprotected from price increases in the electricity system, a new poll shows. “Ontarians have never been this angry” (National Post)
September 12, 2016 – As part of today’s Throne Speech, the government of Ontario has announced plans to remove the provincial portion of the harmonized sales tax (HST) from hydro bills to offset rising costs for ratepayers. They say removing the eight per cent provincial share of the HST as of January 1, 2017 is expected to result in savings of $130 for the average household a year. Rural ratepayers could receive additional relief resulting in $540 a year in savings. The rebates will cost taxpayers about $1 billion a year.
FOCA believes that only those customers currently eligible for the Rural or Remote Rate Protection (RRRP) will be eligible to receive the announced “rural rebate”. (Note that rate reductions/rebates etc afforded through the RRRP are paid for by all other ratepayers)
See more updates on electricity pricing changes here
“I think it’s important for us to recognize that we’re doing something for our remote rural and northern customers and consumers as well,” Energy Minister Glen Thibeault told reporters. “They’re going to be saving about 20 percent on all of the bills and that’s significant for them.” Whether in Kenora, Sudbury, Belleville, London, or Barrie, your government has listened to and has heard your concerns,” said the speech, which was read in the Legislature by Lieutenant Governor Elizabeth Dowdeswell.
Auditor general Bonnie Lysyk has said the electricity portion of hydro bills for homes and small businesses rose 70 per cent between 2006 and 2014.
In reaction to the Throne Speech announcement, the Provincial NDP have stated: “Get it over with and permanently take the HST off the hydro bills.” Progressive Conservative Leader Patrick Brown called the tax cut “merely a Band-Aid solution.” The Green Party has blamed the refurbishments of nuclear generating stations for adding to Ontarians hydro bills.
More media on the 2016 Throne Speech:
January 16, 2015 – Why cheap hydro was too good to be true (Toronto Star)
December 2015 – As reported by FOCA repeatedly over the past year, the direction from the OEB to Hydro One to move to all-fixed distribution rates means that Small rural customers facing big hydro bill jumps (Clean Air Alliance)
Dec.2/15 – Auditor General releases 770 page report, including comments on green energy, Hydro One, and much more.