February 2014 Update – Electricity Rates set to rise

February 2014 – Hydro One Networks has filed a rate application for their regulated prices covering the period from 2015-19. FOCA will be intervening in these hearings to represent the interests of residential waterfront property owners, who comprise a significant portion of the Hydro One customer base, including the majority of the customers classified as “Seasonal.”

Note: Hydro One has been requested by OEB to provide the rate scenario for eliminating the “Seasonal” Class, and placing all customers within the appropriate density class of customer. FOCA is monitoring this situation very carefully as there are concerns that a significant shift in customer classification could harm many “low density” customers.

Seasonal Hydro Bills explained – an overview from Hydro One


Background:

Hydro One’s 2015-19 rate application (EB-2013-0416) was recently filed with the Ontario Energy Board (OEB). It is a massive application of over 3,000 pages and has significant direct and indirect implications for all customers.

As ordered by the OEB, a major study was carried out to justify Hydro One’s density-based rate structure for residential and small general service customers. The study found that the existing rate differentials and density definitions were justified, but also found that many customers were incorrectly classified.  The recommended reclassification will result in a revenue shortfall of almost $40 million which will be spread across all rate classes, including seasonal customers.

The current occupancy-based “seasonal” definition appears to remain unchanged, though they are recommending that high consumption customers (who consume at least 9,600 kwh annually and at least 600 kwh monthly for a minimum of 10 months) may qualify for year-round residential customer classification.

As a regulated utility, Hydro One must match their revenues with the costs of service, within a range. It has been FOCA’s objective to ensure that Hydro One does not charge customers at the top of the allowable band.  Adjustments to their cost base, and strategic revenue objectives of Hydro One are all in play as part of this rate application, and will certainly impact (increase) rates.

At present Hydro One collects 48% of seasonal revenue from the fixed monthly charge and 52% from the variable consumption charge. They wish to change this by increasing the fixed charge from $19.71 to $31.55 over 5 years which is the maximum permitted by OEB guidelines. This shifts costs from high to low users and is intended  to make Hydro One’s revenue more predictable and less weather dependent.

A “loss factor” study shows that H1 is not collecting enough to cover distribution system losses so they intend to increase the loss factor for the seasonal and R2 classes. For seasonal the loss factor goes from 9.2 to 10.4% and for R2 from 9.2 to 10.5%. Other classes stay the same or go down.

Hydro One is seeking a 7% increase in distribution revenue for 2015, to account for capital expenditures, expected increases in general interest rates over the next 5 years, for increased vegetation management, and to pay for the “Smart Grid” program to accommodate new wind and solar projects, the vast majority of which are in their rural service territory.


July 2013: Hydro Rate Consultation

As part of its upcoming rate filing with the Ontario Energy Board, Hydro One consulted seasonal property owners to gather their opinions and discuss options for potential changes to seasonal property rates. Hydro One asked FOCA to reach out to representatives from across our membership to request participation in a small focus group consultation.

Hydro One retained Citizen Optimum to carry out small focus groups of up to 10 seasonal customers each at 4 locations, for people who have an interest in Hydro One generally and seasonal rates in particular.

Please Note:

FOCA’s representatives have expressed in no uncertain terms that the process and timing of this consultation fails to meet any definition of true public consultation, and the results from this exercise will provide very limited insight into their rate structure proposals.

2013 Update: FOCA’s key concerns with Seasonal Electricity Pricing Persist:

  • High and obscure fixed (“Delivery”) monthly charges
  • The need for transparency about the monthly costs related to Smart meters
  • The need to return the “Revenue to Cost ratio” to unity (seasonal class is currently overcharged
  • Potential realignment of density classes which would negatively impact most seasonal ratepayers
  • The requirement that the premises be occupied 3 days/wk to qualify for year-round status.

Summer 2013 – Sources of Electrical Power in Ontario up for Review

Deadline for comment extended to September 16, 2013

(From IESO): Ontario has a diverse supply mix that is in the process of incorporating increasing amounts of renewable forms of energy.  There is 35,858 MW of installed generation in Ontario’s electricity market, though the amount of generation available at any time varies.

Ontario’s installed generation capacity includes:

Nuclear: 12,998 MW or 36.2%
Natural Gas: 9,987 MW or 27.9%
Coal: 3,293 MW or 9.2%
Hydroelectric: 7,939 MW or 22.1%
Wind: 1,560 MW or 4.3%
Biomass/Other (wood waste, biogas, etc): 122 MW or 0.3%

Ontario is launching a review of the Long-Term Energy Plan, which will include province-wide consultations on a variety of topics including the province’s mix of energy sources such as wind, solar and nuclear, and conservation.

Until September 16, 2013, the general public, industry stakeholders, Aboriginal leaders, and municipal representatives are all invited to provide their advice on Ontario’s long-term energy needs and how to meet them.

For information and links to the ER posting, visit: Reviewing Ontario’s Long-Term Energy Plan


December 2012: Rate reductions for Seasonal Customers

FOCA has been involved in the 2012 rate reviews at the Ontario Energy Board.  Seasonal customers of Hydro One will, as a class, receive reductions on the distribution cost portion of their bills in 2013. Unfortunately, overall rates are set to continue to rise.


February 2012: Drummond Report Released

The Commission on the Reform of Ontario’s Public Services recommended Ontario municipalities charge rate payers the full cost of water and that the province consolidate the 80 local electricity distribution companies along regional lines. Read more…

Michelle LewinFebruary 2014 Update – Electricity Rates set to rise