(August 3, 2016) Rather than ensure the costs of Ontario’s cap and trade program are fully transparent to natural gas customers, the Ontario Energy Board has decided to lump them in with other delivery charges.
The Ontario Energy Board (OEB) has decided that natural gas bills shouldn’t identify the cost to customers of the province’s cap and trade program.
After talking to their customers, Enbridge and Union, the province’s two largest gas utilities, asked the OEB to allow them provide a line item on monthly bills that clearly identifies the cost of the province’s cap and trade program. Separating these costs for consumers, the utilities argued, would promote transparency and provide a more detailed breakdown of the costs of consuming natural gas.
An overwhelming majority of gas customers agreed.
According to research from Enbridge, 86% of its customers wanted to see a specific line on their bill each month “detailing the costs associated with cap and trade.” This would include the cost to the utilities of purchasing carbon credits to offset the emissions that result from heating homes, water and transporting gas across the province, as well as the administrative costs incurred by the utilities to establish and maintain the program.
Union also provided the OEB with findings from its own research that showed customers were “nearly unanimous” in that any cost related to the province’s cap and trade policy should be “specifically referenced” on monthly gas bills. The most common reason for doing so, the utility heard, was for “simple clarity, transparency or full disclosure.” Many of the respondents said not separating the cap and trade costs would “amount to being deceived.”
The OEB didn’t see it that way.
The OEB ruled that the natural gas utilities should instead incorporate the costs of the complying with the cap and trade program in a catch-all line item that referred to the “delivery” portion of monthly bills. While the OEB admitted that it’s “important to provide customers with the information they need to better understand energy costs” it ruled that those customers most interested in doing so would need to call their gas utility to request the information individually.
Instead of providing actual cost data to consumers, the OEB — whose official mandate is to protect the “interests of the consumer”, among other duties — also ruled that it would provide “key messages” about the cap and trade program that all of the gas utilities will use in their communications with residential and small businesses customers.
The OEB has in recent years increasingly talked about becoming more “consumer-centric”. In a recent speech, the Chair of the OEB talked about “giving consumers a voice at the table” through more “focus groups and consumer surveys”. Ironically, the decision to bury the costs of the cap and trade program in general delivery costs ignores the specific requests that customers made for enhanced transparency.
Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or by phone at (416) 964-9223 ext 236