We at Balsam Lake Association thought it might be helpful if we explained the components of your hydro bill and then shared with you some changes in those rates that are about to be implemented.
Our Hydro One bills are basically comprised of three components:
1. The electricity charge – this is the commodity charge and reflects the volume of electricity you have consumed, priced based on the time-of-day you used that energy.
2. Delivery – this is the charge applied by Hydro One for bringing the electricity to your residence at Balsam Lake. If you have a ‘primary residence’ in the GTA for example, your delivery rates will be set by your local hydro utility.
3. Other charges and credits – this is comprised of a regulatory charge, the debt retirement charge, HST, and Ontario Clean Energy Benefit.
Our focus of attention is the delivery component of our Hydro One bills. The majority of Hydro One residential rates are ‘density-based’ into three groupings – urban, residential-medium density (R1) and residential-low density (R2), with a fourth class of service titled ‘seasonal’ which is not density-based. Hydro One is serving seasonal customers located within all three density-based communities. The bulk of the seasonal customers around Balsam Lake are within the R1 zone.
The delivery rate for seasonal customers is approximately two and one half times (250%) higher than that of the permanent residents in the same community. Historically, this was based on the fact that seasonal customers only consume hydro for a portion of the year while Hydro One must build and maintain the network for 365 days a year.
Today, many of us use our ‘seasonal’ property 12 months of the year and so we consume electricity for those entire 12 months – much like our permanent resident neighbours. The current rate structure does not recognize that pattern.
In 2011 Hydro One filed a rate application with the Ontario Energy Board (OEB) to increase delivery rates. A team from the Balsam Lake community was created to officially intervene in that process and registered with the OEB as the Balsam Lake Coalition (BLC). Through that process the OEB recognized that the seasonal rate class was flawed and instructed Hydro One to conduct some focus groups with its seasonal customers to better understand the issue.
In 2013 Hydro One returned to the OEB with a full cost-of-service application including the results of the seasonal customer focus groups. Once again, BLC intervened and argued that the only defensible solution was to eliminate the seasonal rate class.
After a very lengthy process the OEB issued its complete decision including a directive to Hydro One to discontinue the seasonal rate class and to move all of these customers into their respective density-based rate class. I quote from that decision:
The OEB finds the arguments of BLC to be persuasive. Hydro One has developed the technical capability to implement and maintain density-based rates for its non-seasonal residential classes. These classes are defined by their geographic location in relation to the amount of distribution system assets that are required to serve each customer……… The OEB agrees with BLC that the existence of density-based rate classes erodes justification for the retention of the seasonal class. The OEB finds that the seasonal class should be eliminated for rate setting purposes. Existing seasonal class customers shall be placed in a residential class according to their density.
The full decision is available on the OEB website under decision #EB-2013-0416, dated March 12, 2015.
Hydro One has been instructed to return to the OEB in August 2015 with a transition plan that will see the elimination of the seasonal rate class, beginning in January 2016 and to continue for the next five years. The Balsam Lake Association was a strong supporter of the BLC and all of its efforts here.
If you have any questions or wish some further details, contact us through our web page at: www.balsamlakeassociation.ca.
Photo courtesy of Greying_Geezer No Alterations Made - Creative Commons
