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ACTION LINE: Do hydro debt charges leave you in the dark?

By: Al MacRury | Sep 05, 2013

About 4.9 million Ontario consumers are waiting for the answer to a burning question. “I’m sick of paying the debt retirement charge (DRC) on my hydro bill,” reader Elaine Hart recently complained. “When is this debt ever going to be retired and why is it even on my bill?” Well, we’re getting close.

“The DRC was added to every energy bill in 2002, a direct result of the previous PC government’s failed restructuring of the electricity sector in 1999,” says Susie Heath, press secretary for Ontario Finance Minister Charles Sousa. “When we took office in 2003, the total residual stranded debt was $20.6 billion. Since then, we’ve reduced it to $4.5 billion and expect it will be fully paid off between 2015 and 2018.” The DRC is based on consumption. Most electricity users pay the DRC at a rate of 0.7 cents per kilowatt hour (kWh) of electricity consumed. DRC rates have remained consistent over the years.

The Ontario Electricity Financial Corporation (OEFC) was established by the Electricity Act, as part of the restructuring of the former Ontario Hydro and is responsible for retiring its debts. OEFC inherited $38.1 billion in total debt and other liabilities when the Ontario electricity sector was restructured. A portion of that debt was supported by the value of the assets, leaving more than $20 billion to be paid off. It was decided that consumers would pay off the remainder of the debt on their hydro bills.

Meanwhile, Horizon Utilities Corporation’s vice-president of customer service says that firm has 239,000 customers in the Hamilton/St. Catharines area.

“As you know, Horizon Utilities is mandated to charge and collect the DRC from customers,” Eileen Campbell said. “Hamilton customers pay this charge at the rate of 0.7 cents per kWh and St. Catharines customers pay 0.68 cents per kWh. The rate is slightly different due to a credit created from some assets in the St. Catharines service territory.”

In 2011, Horizon remitted $32.4 million in DRC to the province and in 2012, $32.8 million. The average Hamilton hydro customer pays about $67 a year in debt charges, based on usage of 800 kilowatt hours per month. Informed of the pending good news, Hart was still dismayed. “I didn’t create the debt,” she said. “Why should I have to pay for it?’

Despite issuing a public promise to refund $30,000 to a Dunnville homeowner, a southern Ontario solar energy company continues to give David Crumb the long, slow burn. In a June 4 response to Action Line, vice-president Gordon Simmons of Certified Solar Inc. promised Crumb would be refunded in 30 to 90 days. “Yes, his refund is in process,” Simmons stated.

As reported April 30, a salesman told Crumb the Ontario Power Authority’s microFIT program would pay him cash for solar energy he converted into electricity and put back into the supply grid. The $30,000 represented the down payment on his $96,000 ground-mounted system. However, your local hydro company must have available capacity, enabling you to connect. And Haldimand County Hydro doesn’t, because the Hydro One transfer station in Dunnville is running at maximum capacity and there are no immediate plans to upgrade the facility.  Nobody told Crumb that when he signed his contract, because they likely didn’t know.

“New OPA processes are now available to check capacity prior to accepting contracts,” Simmons said. “Certified Solar’s new policy is to pre-screen all applicants for capacity prior to offering a contract to supply solar energy.”

In mid-August, Crumb received an email from the OPA, telling him his application had not been approved.


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