Rising electricity costs concern rural residents and cottagers

Letter from Federation of Ontario Cottagers' Associations to Ontario Premier Kathleen Wynne

Hydro towers and a wind turbine in southern Bruce Peninsula
Hydro towers and a wind turbine in southern Bruce Peninsula

The Ontario Legislature resumes sitting today (February 21) for its spring session, and the cost of hydro is expected to dominate the agenda. Last week, the Federation of Ontario Cottagers’ Associations (FOCA) sent the following letter to the Premier Kathleen Wynne and Minister of Energy Glen Thibeault.


Dear Ms. Wynne,

The following comments are related to widespread concerns about the unrelenting rise in electricity costs for rural residents.

Ontario’s economy has flat lined. Wages and the Consumer Price Index are rising in the 2% range and yet the proposed changes to electricity delivery rates will mean bills will rise another 200% for some low use rural customers.

FOCA believes that the recent move to All-Fixed delivery charges, and the related phase-in period has already shifted considerable burden to many R2 and Seasonal Class customers. And yet, we are barely into Year Two of the eight year phase-in period.

Fully 46% of Seasonal customers consume a monthly average of less than 150kWh, and it is quite apparent that the “penalty” to low-volume users will be further aggravated by eliminating Hydro One’s “Seasonal” Class. With All-Fixed delivery charges, the elimination of the Seasonal Class will result in only marginal benefits to those customers moving to the R1 Class, at the expense of very large negative impacts on those moving to the lower density R2 Class.

FOCA cannot accept and vigorously objects to the current plan that would see so many of our members and thousands of low-use customers in rural Ontario seeing electrical bill increases of over 200%. Furthermore, FOCA objects to the discriminatory mechanism which provides a monthly $60.50 bill credit to R2 customers, while Seasonal customers will be burdened with a monthly fixed delivery cost in excess of $117, up from the current $36.28, with no bill credit available.

Virtually every other electrical distribution utility in North America offers relief to customers in remote and low-density areas. Exhibit 1 (see below) illustrates the delivery costs that utilities charge in other provinces. The Hydro One rates are already extremely high by comparison. After phase-in, for the 84,000 Seasonal customers moved to the R2 Class, delivery costs will more than triple.

 

Exhibit 1:

2016 Annual Fixed Delivery Cost for Seasonal Residential Electrical Power Customers

Nova Scotia $64.98 Seasonals pay half of Residential Rate
Quebec $148.34 Seasonals pay regular Residential Rate
Manitoba $93.84 Seasonals pay regular Residential Rate
British Columbia $66.98 Seasonals pay regular Residential Rate
Ontario $389.64 Seasonals pay 46% more than Urban Residential Rate

Planned All-Fixed Delivery Cost with Seasonal Class Eliminated

Ontario (phased-in) $1,404 Seasonals moved to R2 Rate Class

 

On behalf of the over 200,000 electrical customers that are within the waterfront residential community, we strongly urge reforms on the electrical pricing file and anxiously await your plan to mitigate these costs for Ontarians.

Sincerely,
Terry Kennedy, President, FOCA
Terry Rees, Executive Director, FOCA

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