Opposition parties calls Ontario Energy Board ruling a ‘scam’

Once Again Ontario Families Stuck with the Bill…This Time for Illegal, Interest Charges and High Priced Lawyers

by Rob Ferguson , Toronto Star

The government is standing idly by as electricity ratepayers get hit in the pocketbook again, opposition parties charged Wednesday in the wake of the latest Ontario Energy Board ruling.

This time it’s a decision that local electrical utilities — on the losing end of a Supreme Court case for charging interest rates of over 60 per cent on late bill payments — can get the $18 million back from customers across the board.

“It’s a scam,” Progressive Conservative Leader Tim Hudak shot at Energy Minister Brad Duguid in the Legislature’s daily question period, saying the Liberals have turned the energy board into “another McGuinty tax collection agency.”

“Why is it when Ontario families even win in the courts you still make them pay the price of illegal activity?”

The typical residential customer will see an extra 20 to 30 cents a month on their electricity bills for two years.

Duguid said the government has directed its transmission utility Hydro One not to charge the money to customers it serves directly and that he “strongly recommends” local utilities across the province will follow that lead.

“It’s a decision they will have to make,” Duguid told reporters, noting all utilities are governed by local boards subject to public pressure.

The government should be standing up for consumers given dramatic increases in electricity prices over the last few years, said New Democrat Leader Andrea Horwath.

“Any minister who expects everybody to just play nice is, I think, a little bit naïve,” she added.

“It’s not a lot of money but, again, it shows nobody’s paying attention to the fact that folks are tapped out and this is another slap in the face.”

Duguid said the high interest charges on late payments date to the early 1980s when the Progressive Conservatives were in power under then-premier Bill Davis, and a lawsuit challenging the practice was subsequently launched in 1998 with a court decision in 2010.

“Governments of all stripes were in power when this was taking place,” he said. “We’re not passing the buck.”

The Supreme Court first ruled in 2004 that late payment penalties charged by natural gas companies exceeded the 60 per cent limit allowed under Canadian law, and legal attention then switched to electric utilities.

They agreed it would be impossible to find and reimburse customers who had paid the exorbitant charges, so the money collected was paid into a United Way fund to help families pay their winter heating bills. The utilities then sought the energy board’s permission to recover the money from all customers, including those who paid their bills on time.

That means even customers who were in good standing get a penalty, said Hudak.

“What a bunch of nonsense.”

Meanwhile, the NDP revealed a freedom-of-information request showing the government expected to take in an extra $1.6 billion a year as the 8 per cent provincial portion of the 13 per cent HST was extended to electricity, gasoline and fuel oils.

“They didn’t want anybody to know,” said Horwath, noting the government is probably raking more in with the tax on soaring electricity and gasoline prices in the wake of Middle East revolts pushing the price of crude oil higher almost daily.

But Finance Minister Dwight Duncan denied there is a windfall because money goes back out to consumers in rebates and tax credits.

“Make sure you look at the whole picture.”

The $1.6 billion figure is close to the estimated $1.7 billion the NDP calculated and made political hay with last year.

24 thoughts on “Opposition parties calls Ontario Energy Board ruling a ‘scam’

  1. Mr. Duguid, The jig is up! Stop this fraud against the public now. You and your whole party should be charged with reckless endangerment casing injury to the health and well being of the public at large.

  2. There are lots of real scams in the electricity sector that need fixing but the recovery in rates of late payment penalties isn’t one of them. The late payment charges the courts found to be illegal were approved by the respective gas and electricity regulators of the day. The purpose and effect of the penalties was to reduce the rates paid by the responsible consumers who pay on time. Any money the utilities earned from the penalties was rebated back to consumers. The OEB held a thorough and public review of the issues, including public hearings and resulting in a decision with reasons. We’d be in much better shape if the important decisions were tested using a process with this transparency and fairness.

  3. So to recap, Tom, my past hydro rates were arbitrarily lower due to a usurious level of interest on late payment or delinquency by a minority of customers.

    Now that the courts have determined that is an unacceptable practice, my rates are going up to help cover past, present, and future deadbeats. Plus court costs.

    Plus the fines went to charity because nobody knows who got overcharged. I have a hard time believing utilities have no idea who owes them money and how much. They are usually pretty damn quick to tell me if I miss a payment.

    It may be transparent and reasonable and small potatoes, but at the end of the day my hydro rates are going up, again. To support those who cannot, will not pay.

    And with every increase, the number of delinquencies necessarily grows.

    And we are back to where we started.

  4. The Ontario Hydro system has been turned into a piggy bank or slush fund to serve the needs of the political class and not the people.

    The whole system needs a thorough financial review so it can be once again a low cost producer of electricity that serves the needs of all Ontarians.

  5. A point of interest and a question: I was at the Home Depot in Scarborough last week and noticed several buckets in their aisleways collecting leaking water from their roof. When I questioned why the roof was leaking in such a relatively new building I was informed that Hydro installed several solar panels on their flat roof which then caused the leaks. Will the roof cave in one day because of the damage caused by the installation of these solar panels? Beware! Also tell me who will be liable to pay the cost to repair the structural damage caused by these solar panels? The good citizens of Ontario, no doubt, will be on the hook for this boondoggle! Where on our bills will the goverment bury this cost?

  6. Yes, Premier or head of a comission investigating Hydro system electricity production costs!!!

  7. AAW,

    Wonder what it will cost when the ceiling/roof falls on customers?

  8. OK Folks!………..do you think it just may be time for some real ACTION here?

    “illegal charges” on our Hydro Bill, unjustified increases on future bills due to decisions by a “dysfunctional OEB”?…….here’s the thing.

    Start to deduct the amounts that one would consider unjust OFF YOUR HYDRO PAYMENTS!

    One item would be the “debt retirement charge”……start an account in your bank called “Withheld Payments from Hydro in Trust” for instance.

    another item would be the Hydro increases such as the one coming at us for 6.5%…..maybe others could tells us what to deduct, but you get the idea.

    With these deductions in hand, when you pay your bill you also send a letter stating clearly each month how much you have deducted and that deduction has been deposited in a “Trust” account that will be forwarded to Hydro One once you have received a clear and justified explanation what this money will be used for when it clears the Trust account back to Hydro One.

    Obviously McGuinty is out of control with our hard earned money and until he can justify his actions to US then WE must take control of OUR money until someone can tell us where it is going for OUR betterment, not the Governments!!!!!!!!!!!!!!!!

  9. Quixote,

    I share your outrage – but don’t ya think that one such witholding and explanatory note will suddenly result in your smart meter interupting the delivery of electricity?

  10. John criticized my defense of the OEB decision by complaining that “…my rates are going up to help cover past, present, and future deadbeats…”. Leaving aside the OEB’s decision regarding historic practices, all power and gas rates in Ontario today include an amount to cover the cost of current deadbeats. The principle is sound, if unsavory. The costs are not trivial. For example, for Toronto Hydro the costs in 2011 will be approximately $8 million. Effective measures to manage deadbeats are important. Detroit Edison is an example of a utility that has been severely harmed by deadbeats.

  11. Tom, I should have used the word ‘deadbeat’ with a caution.

    There are folks who simply decide to skip paying their bills. Whether it be fraud, running a grow-op, or simply walking away.

    When you walk away from a mortgage, you invariable walk away from the utility and property bill associated with it as well. The City of Detroit is a stark example; they have so many foreclosed properties to unload they are currently paying city employees to assume them and move in.

    But with the ever increasing energy prices being shoved at us, more and more people will face involuntary energy poverty. Energy and food prices have become interconnected. More and more of us are facing difficult decisions, not entirely of our own choosing. Taxes rise, pensions suffer. Medical costs rise. Hydro costs, gasoline prices just add to a burden. Have you checked the price of cat food recently?

    Any increase, no matter how justified, is an increase.

    Now when I use my VISA card, I am charged the retail price for items I buy. At the end of the month, I pay for the list of items purchased. Leaving hidden transaction charges aside, I pay only for what I buy. But if I make a lesser total payment, then I assume an interest charge on the balance, at a rate that is established to cover not just the borrowing cost of my balance, but the balance of all losses incurred by the lender.

    Or perhaps the impact of the court decision has not reached the credit card companies yet.

  12. Lorne Gunter weighs in with his take:



    Last year I pondered an e-mail campaign I called Nothing in November. Everyone in the province would simply not pay their hydro bill for November.

    We could now call it Missing in May. I have no idea what panic you could create with a simple idea that maybe nobody would pay their hydro bill in May. Or an Absent in August?

    Right, the province would disconnect everyone? hahaha! Apparently, late charges are paid by everyone anyway.

    We would end it with an Out in October.

  13. John,

    If we all submitted letters saying, “regretfully, I will be unable to pay this month”s hydro bill. I have instead chosen to redirect these funds toward legal action taking place in defense of my rights.”

  14. I like Robins idea, I think this would make a very strong statement. May would be a fine time to have all our hydro shut off for lack of payment. Stock up on lamp oil, candles & such. Propane for the barbie. Now that is a protest with clout! Keep your PC powered up at local coffee shops and use a bell stick to keep up.

  15. Robin, Melodie, your ideas are excellent but to make this “threat” work really work, you would need a viral campaign of millions, not thousands of letters. Everyone in Ontario would offer to participate. The threat impact alone would be worth the fun.

  16. Yup, I can see it now, McGuinty claiming credit for all those MW of conservation power…

  17. How about a “Power Free Day?”………………everyone across the Province just turn off their breakers for one 24 hour period and see what happens to the Grid!…………of course we would need to puck a Sunday in the summer when everyone could get together outside in the warmth and have an outdoor day…….then at night, light candles and plan on listening to radio on batteries or better yet, if people can’t stand to go without TV, borrow or share a generator with their neighbour to power their evening entertainment?…….

    Of course to engineer something like that would require us to become an NGO, apply for Grants and hire a bunch of people to pass out flyers and $$ to buy ads on TV and papers!
    Ah.forget it…was just an idea!

  18. No! Do it now! The sooner the better. If yo want to make a statement like that you have to seize the moment — no pain no gain. No risk no reward!

  19. My bath tub is always full of water………..we have so many power outages up our way that if we went more than 3 weeks without one, people start wondering what is wrong!

    Our grid is so old that out of town Power Workers during the Ice Storm said they couldn’t believe how badly built our grid was in comparison to the others closer to Ottawa………………anyway, let know the date and it will be like any other day in our lives here..generators are gassed up and candles and coal oil stocked……………..Once the power goes out I can be watching TV within 10 minutes off the grid, and I’m sure 90% of the rest of our neighbours could beat that!

  20. http://www.hydroone.com/RegulatoryAffairs/Documents/EB-2009-0096/Rate%20Order_HONI_20101221.pdf

    The above link will take you to the newest rate charges approved by the Ontario Energy Board for Hydro One Networks Inc. The unfortunate part being that Hydro One does not seem to be too concerned about holding fast to these rates. If you look at how the Regulatory Component is to be calculated and then substitute your own hydro use to see if it was calculated correctly, according to these parameters, you will find it is not. Who gets to choose when and how this calculation alters? It seems quite basic yet not adhered to at all.

  21. And let’s not forget about the debt retirement charge that will never go away just because they decided to change the name years ago the public never got a set amount as to what that debt is. So they can keep charging us this for what forever. It’s an outrage and makes me so sick how everything is so corrupt these days will it honestly take a revolution or civil war to make things good again? I don’t have the answer to that but I can say that things are getting to a breaking point and you can’t keep taxing the hell out of everyone. We have escalating food prices, gas prices, hst, and outrageous hydro fees enough is enough.

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