November 10, 2000
Engineer can’t get answer about unbundled bills.
ELECTRICITY BILLS are changing with the advent of a competitive market. But customers may not understand the new “unbundled” bills or how the charges are calculated. Paul Kozma, a retired engineer, has gone to great lengths to figure out his Toronto Hydro bill. He’s spent a year trying to get answers from the utility, the Ontario Energy Board and the Ontario Ministry of Energy.
He even tried to intervene at Toronto Hydro’s upcoming rate hearing, but missed the deadline. “I made a commitment that I will follow a logical route to get to the bottom of this,” Kozma said, asking for our help with the billing issue.
In early 1999, after six former utilities amalgamated, Toronto Hydro redesigned customers’ bills and listed the individual charges that make up the total energy cost.
Unbundling lets you see exactly what you’re paying for each component of electricity and, in the future, compare prices.
The bill had a customer charge (a flat monthly charge for administration); distribution charge (covering the cost of wires running down your street); and energy charge (covering the actual electricity you use).
Kozma is questioning the customer charge, which started at $8.60 a month. Since Toronto Hydro sends bills every two months, his first few bills had a $17.20 customer charge. But in mid-1999, he found a customer charge of $20.64 on his bill.
The billing period was 72 days, he noticed, and the customer charge was pro-rated (72 days at $0.2867) to cover that longer interval.
Checking further, he was told Hydro can’t read the meter every 60 days. The billing period may be longer or shorter because of storms, residential moves, changes in meter reading routes and inaccessible inside meters. When the billing period is more than 65 days or less than 55 days, the customer charge is pro-rated. “In many cases, there is a corresponding adjustment in the opposite direction upon resumption of the normal billing schedule,” said Bruce MacOdrum, Toronto Hydro’s vice-president and general counsel.
Kozma, who tracks his bills on a computer spreadsheet, waited for an adjustment in the opposite direction. But his next bill covered 60 days, followed by others going from 60 to 64 days. He was never compensated for the extra-long billing period in 1999 or the extra customer charge of $3.44. “I’m not after the money,” Kozma said. “It’s the principle.”
His question: Why should customers be penalized when their meter isn’t read within 55 to 65 days, especially when the delay is Hydro’s fault?
Other utilities don’t pro-rate the customer charge, Kozma points out. Enbridge Consumers Gas, for example, charges a flat $10 a month.
Toronto Hydro’s customer charge is now $9.46 a month, or $18.92 every two months and still varies if the meter reading interval is not 55 to 65 days.
“This occurs very rarely,” said Tom Moss, senior communications officer, “in less than 3 per cent of cases. And when it does occur, the amount is less than $3.”
He agreed it’s possible for customers to be overcharged one month and not undercharged later on. “We’re trying to build a system that’s fair for everybody and no system is perfect,” Moss said.
Toronto Hydro doesn’t pro-rate the customer charge to make extra profit, he emphasized. “It’s revenue-neutral for the system.”
But is it revenue-neutral for each customer?
“I’m going to suggest we take another look at this,” Moss said after our third conversation about Kozma. “He may have an issue.”
There’s another issue here: communication. Ontario’s electricity market is in transition, which means utilities should spend a lot of time explaining what they’re doing.
But Kozma got little help from Toronto Hydro, despite numerous calls, letters and e-mails. And there’s no explanation of the customer charge on customers’ bimonthly bills.
The Ontario Energy Board and the Ministry of Energy should prepare people for electricity competition. But they’re not doing enough, said Tom Adams, executive director of Energy Probe.
“I’m very critical of regulators for not giving consumers more useful information,” he said. “When the responsible officials are not assisting the public, there’s an opportunity for retailers to exploit ignorance.”