‘It’s crazy,’ cottage owner says of shocking hydro delivery charge
Toronto resident Nick Pemberton used $1.30 worth of electricity at his Muskoka cottage in the fall — and paid Hydro One $82.53 to deliver it.
“It’s not a particularly overwhelming bill. It’s just silly,” said Pemberton, a computer programmer who stressed he is not looking for sympathy.
But like many Ontarians putting their hydro bills under the microscope — particularly rural homeowners clobbered by the punishing costs of electric heating in areas without natural gas service — he is looking for some answers.
“I posted it on Facebook as a joke. And then I heard from people who were paying $120 or $130 on delivery further away,” said Pemberton, whose century-old family cottage is on Lake Joseph. “It’s crazy.”
As preposterous as a bill like that sounds, Premier Kathleen Wynne agrees it’s no laughing matter.
“Every month, people in our communities are struggling to cover the total cost on their bills,” she said.
Wynne acknowledges that distribution fees need a closer look as her government scrambles to defuse consumer anger and frustration.
“There are people in the province paying disproportionately high delivery charges,” Wynne told reporters in Kitchener.
Typically, delivery fees are 30 to 40 per cent of a bill.
Based on the cost of building, maintaining and keeping transmission lines in good repair — Hydro One alone has 123,000 kilometres of wires carried on 88,000 towers over a service area twice the size of Texas — the fees can vary widely depending on where you live and how much electricity is used.
“One of the things I hear a lot about . . . is delivery charges. And so we’re looking at what we can possibly do to lower delivery charges,” the premier said. “We just have not landed on exactly what it is we’re going to do.”
Industry insiders say there is no “magic bullet,” but possible solutions for easing bills include subsidizing the delivery fees through tax revenue, putting a share of expensive new sources of renewable power on the tax base instead of hitting hydro ratepayers, or equalizing delivery charges by raising them in cheaper-to-serve urban areas to offset costs for hardhit customers in remote ones.
“We’re one of the few systems that does this,” Ferio Pugliese, hired from consumer-friendly WestJet last fall as Hydro One’s executive vice-president of customer and corporate affairs, said of Ontario’s patchwork of different regional delivery fees.
Green Party Leader Mike Schreiner favours equalizing delivery charges, meaning the overwhelming number of urban Ontarians who enjoy much cheaper natural gas heating would pay a little more to help ease the burden on rural residents with electric heat.
“City folks are not feeling the same pain.”
The government offered hope to rural residents last week by approving a $100-million fund to help natural gas companies extend their pipelines to areas not now served.
That would allow people with electric or oil heat to convert, saving thousands in the long run because natural gas is onequarter the cost of electricity and onethird the cost of fuel oil.
Some help on high bills arrived Jan. 1 when the province began waiving the 8per-cent provincial portion of the HST on electric bills. Customers in remote rural areas are getting extra aid, lowering their costs by a combined total of about $45 monthly.
Delivery costs are higher in northern and rural Ontario because there are fewer customers served by the lines in a situation Pugliese describes as “more hydro poles than people.” In Toronto, there are almost 1,200 customers per square kilometre to share the costs.
Figures from the Ministry of Energy show the average monthly charge for delivery of electricity is $32 for typical household consumption of 750 kilowatt hours. That includes meter reading, general utility operations and a variable charge based on the amount of power used.
Fees range from a low of $15.55 at tiny ELK Energy Inc. in Essex, near Windsor, to a high of $90.84 for seasonal customers in remote areas served by Hydro One.
Costs of service for municipally owned ELK for its approximately11,000 customers from Lake St. Clair to Lake Erie are kept low and “we’re just very customer focused,” says Mark Danelon, director of finance and regulatory affairs.
Toronto Hydro, one of the largest local utilities in the province, is above average at $37.57. London, Kitchener, Sudbury and Windsor are all in the $24 to $27 range.
While the skyrocketing cost of electricity has been widely publicized by critics — up 101 per cent since 2006, according to Hydro One — delivery charges, up less than 50 per cent in the same period, are getting more attention from ratepayers now for good reason, opposition parties say.
“It’s coalescing because people, particularly in rural Ontario, see bills for delivery that are higher than the cost of the electricity they’ve consumed. It’s crazy,” says New Democrat MPP and energy critic Peter Tabuns.
“Their anger is the result of being ignored by this government for almost a decade and now all of a sudden the government says they’re going to fix everything,” adds Progressive Conservative MPP John Yakabuski. “They don’t have any credibility.” Energy Minister Glen Thibeault says prices for electricity and delivery have risen because of massive improvements to the hydro system.
“We recognize that the investments required to upgrade an antiquated system prone to brownouts and blackouts has come at a cost to electricity consumers and we’re trying to fix that.”
The government offered hope to rural residents last week by approving a $100-million fund to help natural gas companies extend their pipelines