(TORONTO, ON) – Last Thursday, the Ontario government introduced legislation that will, if passed, lower electricity bills by 17 per cent on average for residential and small business customers. The 17 per cent includes previously announced rate cuts by the Ontario Energy Board, which took effect on May 1.
The 17 per cent does not include the 8% Ontario sales tax which was removed from electricity bills in January. The reduction was offset by tax increases of a combined equal amount. These increases, known as cap and trade taxes, were added to gasoline and natural gas purchases.
The proposed bill, known as the Fair Hydro Act, 2017, will also hold hydro rate increases over the next four years to no more than the rate of inflation. Currently the province’s inflation rate is a little over 2 per cent.
If the province continues with 2% inflation, the impact of its 17% reduction will be severely eroded. In four years, the reduction will be less than 9%. On a related issue, the Ontario Energy Board is still contemplating whether or not to extend its temporary ban on the winter discontinuation of service to hydro customers who are late in paying their bills.
The ban has since been lifted and a review is now being conducted. However the OEB, in a May 1 letter to electrical distributors, has cautioned that it will expect them to be, “… customer focused in their approach to any pending disconnections of residential customers and to ensure that they must continue to follow the current rules.”
The ban did not sit well with Windsor’s electricity distributor EnWin, which is owned by the city.
EnWin publicly argued that taking away its ability to cut customers from electricity, even in the winter, would eliminate one of the methods it uses to collect the money it is owed.
The OEB’s letter noted that the distributors are, “… strongly encouraged to work with customers facing disconnection to find solutions that achieve the best possible outcome for those customers, including providing information and payment options to maintain the customer’s connection.”