Hydro One’s failure to communicate rewarded with rate increase

Hydro One fails to fulfill Ministerial directive ... but gets a rate increase anyway
Hydro One fails to fulfill Ministerial directive … but gets a rate increase anyway

OEB approves Hydro One’s failure to communicate

Dwight Duncan, former Ontario Minister of Energy, issued a directive to the OEB on July 14, 2004 in respect to smart meters.  It started with:  “The Government of Ontario has established targets for the installation of 800,000 smart electricity meters by December 31, 2007 and installation of smart meters for all Ontario customers by December 31, 2010.”

That was a tall order with some specifics including this: “A smart meter must be capable of being read remotely and the metering system must be capable of providing customer feedback on energy consumption with data updated no less than daily.” 

Fast forward almost 11 years to 2016: about 50,000 (4.2%) of Hydro One’s customers are receiving form letters telling them instead of being billed on a time-of-use/TOU basis, they will be billed on a RPP (Regulated Price Plan) basis. Additionally most will receive estimated bills most months! The RPP plan prices the first 1,000 kWh at  9.9 cents/kWh for six months in the winter,  reducing to 600 kWh in the six-month summer season.  Consumption over those levels are currently billed at 11.6 cents/kWh.

Why the Hydro One letter? “Poor Communication Reliability” as noted in their submission to the Ontario Energy Board (OEB) on January 30, 2015 when Hydro One responded to “Interrogatory 3” from the OEB. The submission was related to Hydro One’s request to move a number of their customers off of TOU pricing due to their inability to communicate with the smart meters. OEB’s Interrogatory 3 asked Hydro One to advise what were: “a. the advantages and/or disadvantages of switching TOU customers to two-tier pricing including associated demand management opportunities; and “b. the options to achieve compliance and resulting costs and impact on rates.”

The response from Hydro One detailed the “communication” problem and the following on costs:  “Based on a very preliminary assessment, the cost to achieve full compliance (i.e., to have all affected customers on TOU billing) was estimated to be well over $500 million. Hydro One did not estimate the impact on rates, as the detailed breakdown of costs is not available.”

The Ontario Auditor General’s (AG) report released December 9, 2014 stated: “Our work at Hydro One also noted complaints from ratepayers about estimated bills or no bills for extended periods due to Hydro One’s billing-system problems and connectiv­ity issues between smart meters and associated communication systems” and “Hydro One accounted for more than $660 million of the $1.4 billion spent by all 73 distribution companies. About $500 million (mainly from Hydro One) of the $1.4 billion is under review by the OEB and has yet to be approved by the OEB.”

It sure appears the $500 million in the AG report is the same $500 million that Hydro estimated it would cost to get those 50,000 smart meters to communicate at a cost of $10,000 per meter. …

Read the full article here: OEB approves Hydro One’s failure to communicate-March1

(Note: the opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.)