(January 24, 2014) In the spring of 2013, Hydro One launched their new “real time” billing system, allowing them to generate an additional $160 million (reported as an $80 annual cost for a consumer of 800 kWh per month) of revenue.
This billing change became an embarrassment to Hydro One as they entered the summer months and complaints started to pop up with increasing frequency about either the lack of a bill being received or the amounts of those bills bearing no link to reality. The personal experience of this writer was expressed in the late summer of 2013 when our bill suddenly had a new line which Hydro One labeled a; “Miscellaneous Adjustment”.
In the fall, the media started picking up the news of bills arriving that were simply beyond belief and one couple in the Ottawa area received an apology from the than newly appointed CEO, Carmine Marcello who in a letter to the Ottawa Citizen said, “We will learn from this and we will do better.” and went on to say; “The new IT system, writes Marcello, will enable Hydro One “to provide better experience for our 1.4 million customers”. (NB: The 2012 “Yearbook of Electricity Distributors” shows Hydro One with 1.2 million customers. Are the additional customers a result of Hydro One’s attempt to snap up several local distribution companies which they assume will happen?).
That “better experience” came to the Beaver Valley Ski Club last summer when they received a bill for $37,000. They reported that it was a multiple of what they should have been billed and Hydro One apologized and corrected it by sending them another bill for $36 million as the January 22, 2014 article in the Globe and Mail reported.
The billing change that Hydro One made didn’t require them to get an approval from the Ontario Energy Board (OEB) but presumably the OEB would have had to bless Hydro One’s plan to spend monies upgrading the billing system which they knew would, sooner or later, find its way to our electricity bills. We shouldn’t look to the OEB to actually analyze the system changes but they should be upset with Hydro One’s management who obviously failed to test the system properly before the launch, perhaps seeing the benefits of that $160 million in additional revenue as being more important than ensuring the new updated billing system functioned properly?
The abject mess of their billing process hasn’t affected Hydro One’s management though, as they are trying to acquire several small local distribution companies promising local municipal politicians they would; freeze rates, create new jobs and reduce delivery charges while paying huge premiums for the municipalities shareholdings. They seem bent on increasing their monopolistic position by chasing at least four (4) acquisitions to increase their hold over Ontario’s ratepayers! If those offers are accepted Hydro One will need the blessing of the OEB and if given, it will be to the detriment of current customers of those LDCs and raise delivery rates for current Hydro One customers.
Hydro One recently announced they plan to build a new operations centre in Orleans at a cost of $33.4 million to service 39,000 customers in the area. The press release announcing the project carried a quote from Energy Minister, Bob Chiarelli: Through investing in the community, we will increase reliability, reduce costs and better serve our customers. Supporting energy infrastructure is an investment in Ontario families and communities,” said Bob Chiarelli, Minister of Energy. “This new facility demonstrates Hydro One’s ongoing commitment to providing reliable energy and reducing costs for their customers.”
If Mr. Chiarelli wants Ontario’s ratepayers to actually believe anything he says he should have said nothing! Hydro One is the most expensive LDC in the province, continuing to increase staffing levels while having the worst reliability standards. Hydro One’s ratepayers have seen no reduction in their bills and will not see any from this announcement. Since 2005 Hydro One’s client base has increased 5% while staffing levels jumped 39% and operational costs increased 264% (38% annually). This has happened while purchased kilowatts fell 2.5%! Some cost reductions!
Another interesting fact about Hydro One is the claim in their filings with the OEB on the “Yearbook of Electricity Distributors,” that they have NO URBAN customers in a service area that encompasses 650,000 sq. km (60% of Ontario’s total land mass). With the foregoing in mind it is hard to understand why Hydro One also state in the same OEB filing, they have 8,107 kilometers of underground lines or 2,343 kilometers more than Toronto Hydro and close to the total of underground lines of the other 71 LDCs. That seems to indicate Hydro One do indeed service urban centres and should be called to task by the OEB for filing erroneous reports.
Hydro One’s complete mess of their billing system is a testament to their abject failure to consider the effects their monopoly has on the 1.2 million ratepayers that depend on them to deliver electricity to urban and rural communities at a reasonable cost and reflects badly on the OEB’s lack of oversight.
Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation. As with all independent bloggers on this site, Parker’s views do not necessarily reflect those of Energy Probe.