Hydro One Rate Increase Discussed In Leamington

(LEAMINGTON, ON) – Last night, representatives of the Ontario Energy Board were at Leamington’s Sherk Street Kinsmen Recreational Complex. This was the first of nine meetings planned for nine Ontario communities to gauge public response to a rate increase requested by Hydro One.

Attendees were told the meeting was not about the price of electricity, but rather the line item on their bills for the cost of distributing power to homes and businesses. Hydro One serves many municipalities in the province including most of the rural areas of Essex County.

Hydro One is looking for five years of steady rate increases from 2018 until 2022. It says the increases are needed to deal with its aging infrastructure. On average, customers would face an annual rate increase of about $2.35 each month for each year of the five year period, if the request is granted.

It is the OEB’s practice to meet with a selection of consumers before a decision is made on increases. The meetings are part of what the regulator calls a commitment to engage, empower, and protect consumers. These meetings are usually the start of its decision process, which could last a year.

The OEB says it has a dual role; keeping rates low while also making sure utilities have what they need to keep the power flowing. It says Hydro One’s rate increases will not reflect any credits or other changes resulting from the Fair Hydro Act, 2017.

Any amounts approved by the Board will not impact the distribution line of the bill of most Hydro One customers, after the Fair Hydro Act credits are applied.

That Hydro One is asking for a rate increase caught the ire of Fred Hahn, the president of the Canadian Union of Public Employees.

In a statement released on the day of Hydro One’s request, Hahn called it, “… just the tip of the iceberg now that profit-driven shareholders own the majority of Ontario’s electricity transmission system.”

The Ontario government has been selling shares in the public utility, but promises to maintain a minority ownership position. Hahn is convinced selling majority ownership of Hydro One will affect rates.

“We all knew that, if our utility was sold to private interests, rates would go up,” Hahn said. “It’s been less than a month since the ink dried on the sale of the last shares and Hydro One is already making an application for a rate increase.”

Hahn thinks he knows why Hydro One is looking for more money from electricity users.

“The new shareholders want rate increases to cover the system repair costs, otherwise those costs would eat into their profits,” he explained.

In accompanying comments, Doly Begum, campaign coordinator of the Keep Hydro Public Coalition, said her organization, “… warned the government this is exactly what would happen if they followed through with their scheme to sell-off our hydro system. The only way to put this genie back in the bottle is to buy back control of Hydro One.”

Begum claims the OEB is little more than a rubber stamp for raising rates and wondered if, “… anyone really expects anything different going forward.”

The OEB’s Registrar, Kristi Sebalj, who was at the Leamington meeting, has stated categorically that it, “… is up to the company to prove to the OEB why it needs a rate increase to cover these costs. Utilities rarely get all they ask for.”

Since 2009, Sebalj says the OEB has reviewed more than 130 major rate applications and reduced requested rate increases by an average of about 40 per cent. Overall, the Board has kept the annual growth in average distribution rates close to the rate of inflation during the same period.

The OEB is responsible for setting a variety of different rates aside from those the utilities can charge to deliver electricity. Since last year, it has held 15 community meetings similar to Leamington’s and claims feedback from the meetings provided information that guided its final rate decisions.

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About the Author

Robert Tuomi
After initially succeeding as a broadcast journalist and achieving senior level assignments, Robert branched out into marketing communications. As a senior executive, primarily in the high-tech industry, Robert created award-winning and comprehensive, multi-faceted initiatives to enhance sales and expand market awareness for some of the largest companies in their fields.Email Robert Tuomi
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