Parker Gallant: Hydro One, blessed by the Ontario Energy Board

(March 12, 2015) Wow, another great day for Hydro One and another chance to sock it to Ontario’s ratepayers. The Ontario Energy Board (OEB) issued their ruling late today (March 12, 2015) on the Hydro One rate application and pretty well gave them everything they asked for! The OEB also ruled on the acquisition of Haldimand County Utilities Inc. by Hydro One!

The OEB blessed Hydro One on the acquisition of Haldimand County Utilities Inc. the same day they blessed a significant rate increase for the distribution arm of Hydro One. On the Haldimand acquisition, $35 million will be added to the “goodwill” account on Hydro One’s balance sheet and a 5 year moratorium on rate increases will be granted to Haldimand’s ratepayers! You should watch out if you are a Haldimand ratepayer though as five years from closure Hydro One will be before the OEB seeking a huge rate increase.

On the matter of the rate increase sought by Hydro One for their other distribution customers the only part the OEB withheld was a small portion for the OMA (operations, maintenance and administration) increase. Hydro One are coming off a huge OMA increase from 2013 to 2014 of $78 million made up principally of $48 million trying to unsuccessfully solve the billing problems (highlighted by the Ombudsman in his press conference March 11, 2015). Hydro One also experienced a jump of $30 million in bad debts year over year.

Interestingly enough the OEB didn’t connect billing issues to “smart meters” but perhaps the connection was missed as the following from today’s ruling on the rate increase may suggest:

OEB staff noted that the average cost per installed smart meter for Hydro One was $568 (combined capital and OM&A over the 2006 to 2014 period), which is significantly higher than for other distributors.”

Findings

The OEB recognizes that the smart meter program was mandated by government policy and was not discretionary.

Given the significant difficulties of the implementation of Hydro One’s smart meter program, the OEB does not consider the significantly higher average cost to be unreasonable. Therefore a separate proceeding to review the smart meter costs is not required. The program has been completed and the information presented in this application has sufficiently informed the OEB. Considering all of these factors, the OEB will allow the recovery of these costs as submitted.”

Those “significant difficulties” were brought home when I received a text from the daughter of a good friend who opined:

Parker my saga is ongoing…. and as predicted they did send more estimated bills for the balance of the year so technically they reached back well beyond two years. Then for the ‘piece de resistance’ I got not one but TWO ‘actual reading bills’ for December 2014. Imagine that? they took a reading on a given day and processed a bill, then magically got a second actual reading on the exact same day but with higher usage and produced a second invoice for the same period to replace the original ‘actual’ and of course charged me the higher of the two. Needless to say we are at a standoff. They are priceless.

I have left voicemails for the assigned point of contact to literally email me and phone my cell with a specified time to review everything again and have had no word back since before Christmas. Likely she along with all her managers has quit, do they not know that customer service has been contracted out? who are they fooling?

What is evident from the above brief story is that despite the “average cost per installed smart meter for Hydro One was $568” they don’t seem to be working all that well and their customer service unit ignore their ratepayers!

Apparently that didn’t dispel the OEB perhaps because they bought into the story when Hydro One submitted their arguments (Susan Frank, NB: VP & Chief Regulatory Officer, Hydro One) with the following logic:

Imposing a new requirement for all residential consumers to receive bills based on actual meter reads is therefore inconsistent with the foundational specification that the Ontario smart meter solution was built upon”. Later in her submission Ms. Frank states: “Smart meter technology deployed by LDCs, like any other technology, experiences equipment failure that requires time to triage and fix, which causes meter reads to be unavailable, thus leading to estimated bills.

While the actual example cited above is about two “actual” bills citing different consumption levels on the same day, one should assume that the problems preventing Hydro One from having originally provided them to my friends daughter may be a related problem! Providing two actual readings on the exact same day may indicate the equipment, at a cost of $568.00 on average, is at fault?

Despite the obvious, the wise minds at the OEB, granted Hydro One all they asked for in the way of rate increases related to “smart meters” and almost all of their other rate increase requests.

Perhaps the OEB gave their blessing to Hydro One because the “wiser mind[s]” of those individuals who occupied the Energy Minister’s Chair for the Liberal Party were the ones who decreed; Ontario’s ratepayers, should all be blessed with “smart meters” no matter; how much they cost, raised distribution rates or even whether they were reliable?

Something to ponder!

NB: The 2013 Sunshine list indicates annual income of $320,187.

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.

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This entry was posted in Climate Change, Conservation, Costs, Reforming Ontario's Local Electrical Distribution Sector, Utility Reform and tagged , , , , , . Bookmark the permalink.

One Response to Parker Gallant: Hydro One, blessed by the Ontario Energy Board

  1. markwbell says:

    Parker: Equal opportunity in action! Thank you for not kicking renewables!

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