By Chad Ingram
Many cottage owners will see their electricity bills increase substantially sometime next year.
On Sept. 17, the Ontario Energy Board, the province’s energy regulator, upheld a 2015 directive that Hydro One eliminate the seasonal rate classification from its billing system, placing seasonal properties under existing density-based classifications, based on their physical location.
The crux of the OEB’s justification for the change is that under the seasonal property classification, seasonal property owners, depending on the location of their properties, do not necessarily pay their fair share in terms of infrastructure and delivery costs.
Seasonal properties will be reclassified as either medium-density (R1) or low-density (R2), and bills for properties that are re-classified as R2 are the ones that will see an increase, of close to $1,000 per year in some cases, according to Hydro One. Of the approximately 154,000 seasonal properties in Ontario, some 84,000 will be reclassified as R2, and some 70,000 as R1. It’s possible that properties in the R1 category will see only small increases, effectively no change, or even small decreases in the size of their bills, depending upon location.
Hydro One had appealed the directive from the OEB and last year submitted an alternate proposal that would have seen bills for R2 properties increase by about $65 a year. However, that proposal was rejected by the OEB.
“We are disappointed with the decision by the Ontario Energy Board to eliminate the seasonal rate class for our customers,” said Imran Merali, vice-president of customer service at Hydro One. “We advocated for a different solution that would have protected our seasonal customers and reduced the rate impact. We want our customers to rest assured that their rate class won’t immediately change. The next step is to submit an updated report on implementing the elimination of the seasonal class to the Ontario Energy Board by October 15, 2020. We will continue to advocate for our customers throughout this process.”
It could be another year or so before the changes actually come into effect.
The elimination of the seasonal rate classification was advocated against by a number of organizations, including the Federation of Ontario Cottagers’ Association.
FOCA executive director Terry Rees told the Echo the association was disappointed in the outcome, and that the decision would unfairly impact the pocketbooks of many seasonal property owners.
“It’s going to bring a fair amount of upset, in budgets,” Rees said, adding the association had supported the solution being proposed by Hydro One.
Rees pointed out that seasonal properties were already scheduled to be transitioned to all-fixed rates by 2024, meaning there would have been a minimum rate across all seasonal properties regardless of electricity usage.
“We’ll be paying a fixed share no matter how much we use,” he said. “That’s already being phased in.”
Hydro One offers a Rural or Remote Electricity Rate Protection program to provide financial assistance to customers in areas where the cost of providing electricity greatly exceeds the cost of providing it in more densely population areas. However, Rees noted that seasonal residents are not eligible for this program.