2020-Sep-21
OEB Orders Elimination of Seasonal Hydro Rate Class
On September 17, 2020 the Ontario Energy Board (OEB) ordered Hydro One to eliminate the Seasonal Rate Class, reversing its previous agreement earlier this year to retain it.
Hydro One will be required to move all customers into one of their density-based rate classes. The main reason cited for this decision to uphold the principle of “user-pay”. In other words seasonal customers, who only use hydro for part of the year, cannot avoid the cost of maintaining the supply infrastructure for the months that they are not using hydro. These costs apply whether or not the service is being used and should be paid by the customers using those supply lines, instead of other hydro customers, as is the case now.
GBA and others argued that the incremental benefits of eliminating the seasonal class would be minimal but the impact on certain customers would be significant. The OEB decided that is insufficient reason to preserve the seasonal rate class. See the details of their decision here.
GBA has liaised closely with the Federation of Ontario Cottagers’ Associations (FOCA) to argue for retention of the seasonal rate class, given the significant impact it will have on the vast majority of GBA members who use hydro. Those customers will be moved from the seasonal to the R2 rate class and face an estimated average cost increase of 129%. A few GBA members in more densely populated areas will move to the R1 rate class and see a nominal decrease in cost.
GBA will explore options to prevent the OEB’s seasonal rate cancellation decision from being implemented, but the probability of success is likely very low. The best we can realistically hope for is a long phase in period with cost increases imposed incrementally over time. GBA will work with FOCA and others to ask Hydro One (and OEB) to agree to a long phase in period. Hydro One has until October 15 to file a report with their recommendations on the phase in period. Both the OEB (for those with a cost increase of 10% or higher) and Hydro One support a phase in program.