The intent of this article is to provide some background to the issue of Seasonal Hydro Rates.

If you own a second residence in Hydro One territory and it is not your principal residence, then Hydro One classifies you as a Seasonal customer. All Seasonal customers are lumped together in one category regardless of their density and all pay the same delivery rates.

Permanent residents are assigned their class of service based on the customer density of the community in which they live. There are 3 service classes for permanent residents - Urban, Medium density (R1) and Low density (R2). It has been established that Hydro One’s costs are most closely aligned with customer density and so customers in Urban territory pay the lowest rates while customers in Low density (R2) pay the highest rates. Medium density rates are in between Urban & R2. Because of the significant cost to serve customers in R2, a subsidy is paid to those customers by assessing a small surcharge on all Hydro One customers.

 

Seasonal customers are not defined by density but instead by Hydro One’s definition (principal residence? Sleep there how many nights/week?, etc.)  But there is only one class of Seasonal customer although they are served in all three density zones. The result is that the Seasonal customers in the low-cost territory (Urban & R1) are subsidizing the delivery rates for Seasonal customers in the remote (R2) territory. Seasonal customers in R2 territory are not eligible for the subsidy provided to permanent residents.

The Balsam Lake Coalition (BLC) has argued to eliminate the Seasonal class and to fold those customers into their density –based rate groups (Urban, R1 & R2). In 2015 the Ontario energy Board (OEB) agreed with BLC and ordered Hydro One to eliminate Seasonal class. Hydro One has yet to implement that order. In the fall of 2020 Hydro One submitted a plan to bring about the elimination of Seasonal class and the Board is now considering that plan. We are hopeful that the OEB will convene a process in the near future to finalize the implementation of that plan.

FOCA has taken a position that the status quo should be maintained arguing that the elimination of Seasonal class would impose significant cost increases on the Hydro bills for some 80,000 customers in R2 territory. What they don’t discuss is the extent of the subsidy being paid by some 70,000 Seasonal customers in Urban and R1 territories. We feel that component of the issue needs to be considered by all cottagers, not just those in Hydro One’s remote (R2) territory.

BLC does not support maintaining the status quo and, unlike FOCA, we have proposed and alternative rate strategy that offers immediate relief to those Seasonal customers in Urban and R1 territory yet protects the R2 Seasonal customers from excessive rate increases. The link below is to the BLC submission to the OEB proposing a fair and equitable solution to the elimination of Seasonal Class. Cut and paste the link into  your browser to read that submission.

https://drive.google.com/file/d/1b1P_bSCJwoEf5KPHOT8bm7pFng91x3bs/view