Ontario Energy Board Hearing on eliminating Seasonal Rate Class

 

As instructed by the Ontario Energy Board (OEB), Hydro One has mailed information letters to all of its Seasonal Rate Class customers. The purpose of the letter is to inform all of Hydro One’s Seasonal Rate Class customers of an imminent change in their rate class.

In 2015, the OEB agreed with the Balsam Lake Coalition (BLC), that in fact, the Seasonal Rate Class was inappropriate as a unique Rate Class and ordered Hydro One to eliminate this unique Rate Class. After 6 years, Hydro One is finally moving forward on this order. As the letter states, the OEB will not reconsider its decision to eliminate Seasonal Rate Class.

While the letter is factually correct, BLC feels that some clarifications and elaboration would be appropriate. On page 2 of the letter Hydro One presents a table of potential bill impact on Seasonal customers when they are moved into their respective density-based rate groups. The monthly consumption numbers are shown as an average of a 12 month consumption pattern but we know many Seasonal customers, particularly in the R2 class, only consume electricity for 5 months of the year (mid-May to mid-October).

A customer with an average of 350 kWh/month consumers 4200 kWh/year or 840 kWh/month for the 5 months they use the property. Hydro One is required to build their network to deliver to the peak load demand not just the average so while a 350 kWh/month average looks quite modest it is a significant power consumption over the 5 months of active use. The same analysis holds true for the customer with very small consumption but here too a yearly average of 50 kWh/month is really a 5 month consumption of 120 kWh/month. Of the 150,000 Seasonal class customers about 2/3 consume less than 4200 kWh/year yet a full 1/3 (50,000) consume above that rate. This is a significant group of customers who are paying excessive rates to support the high-cost low-volume consumers largely in R2 territory.

The bottom line here is that ALL remote density customers (R2) are very-high cost customers - especially those classified as Seasonal. Their rates should reflect that cost – not be lumped in with low-cost Seasonal customers in medium density territory (R1).

We appreciate that delivering service to R2 customers is costly. The ‘permanent’ residents in R2 territory receive two rate subsidies to help mitigate that cost while presently those customers who are classed as Seasonal do not qualify for those subsidies. . The Balsam Lake Coalition believes that an appropriate form or rate mitigation should apply for ALL customers within the R2 territory and that residency criteria are simply inappropriate and discriminatory. Many ‘permanent’ Hydro One customers satisfy the residency requirement but are in fact, snow birds, who leave their Ontario residence for extended periods during the winter months. These customers enjoy permanent resident hydro rates but in fact are just as ‘Seasonal’ as the traditional cottager next door. A Hydro One customer is a Hydro One customer.

The Balsam Lake Coalition  will intervene at the upcoming hearing to advocate for appropriate measures to minimize the cost impact on ALL Seasonal customers.