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Ontario energy providers will have to stop charging a fee to tell people their power could be disconnected

ABOVE: Woman speaks out after Toronto Hydro charges her $55 to disconnect her power.

The Ontario Energy Board is demanding providers drastically reduce the fees customers must pay when they’re already behind on their bills.

“[The report] truly recognizes that utility companies are in the customer services business,” said Francesca Dobbyn, executive director of the United Way of Bruce-Grey. “And that for low-income customers, feeing them to death just defeats the purpose.”

READ MORE: Ontario electricity companies billed $12.4 million last year to tell customers their power could be cut off

The issue of profiting off disconnection notices was first raised last November when Global News reported electricity companies in Ontario made more than $12.4 million by charging a “collection of account” service fee and for the delivery of roughly 635,000 disconnection notices.

The OEB now says these activities are part of “normal business” operations and customers cannot be charged for them.

“[The changes] demonstrate that the board has listened to customers,” Dobbyn said. “It’s no longer the tail wagging the dog around these issues.”

Announced late Thursday by the Ontario Energy Board (OEB) – the new rules include increasing the amount of time before a gas or electricity bill is “overdue” from 16 to 20 days after it is issued, banning utilities from profiting off the delivery of disconnection notices, and strengthening the rules around equal billing and security deposits for small businesses.

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The changes also force utilities to give customers 33 days, instead of 13, before disconnecting them after their bill is first past due. The rules also prohibit providers from disconnecting people on or before a day when the utility company is closed.

“Coming home on a Friday to find out you’re disconnected and there’s no truck to reconnect you until Monday is punitive,” Dobbyn said.

Changes follow intense public pressure

The changes are meant to rein in the actions of utility companies when dealing with customers struggling to pay their bills.

The issue of disconnections became a thorny topic for former premier Kathleen Wynne’s Liberal government when Global News first reported that nearly 60,000 customers had been cut off from their electricity service in 2015.

“Service rules relating to billing, late payments and fees garnered a great deal of feedback among survey participants,” read Thursday’s announcement from the OEB.

In addition to eliminating disconnection fees for low-income customers and reducing the time utilities can hold security deposits for small business from five years to three years, Thursday’s decision means companies can no longer charge late payment fees on agreed upon payment plans or bill customers for activities related to the collection of overdue bills.

“The OEB acknowledges … that customers who are unable to pay their bills will have difficulty paying collection charges in addition to late payment charges,” the report said.

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Review considered ‘best practices’ of other industries

The OEB’s decision also looked at the “best practices” of other major utilities in North America. In several key areas – especially around fees – the OEB determined its rules did not adhere to the standards of other regulated industries.

The OEB also decided customer service rules should apply equally to both the natural gas and electricity sectors, which wasn’t always the case in Ontario.

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Meanwhile, utility companies expressed concerns during the consultation process that recent changes banning disconnection of electricity during winter months have created the possibility of customers “gaming” the system.

“Generally, it is the view of most utilities and their representatives that a broad winter disconnection ban will not address the root cause of customers’ inability or unwillingness to pay,” the report said.

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“Most utilities agree that without the threat of disconnection, customers do not see the need to make any payment arrangements with their utility,” said the OEB.

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Dobbyn, however, disagrees that increased protections for consumers will necessarily lead to greater abuses. She says the problems identified by the review show that it’s not just “a few poor customers” struggling to pay their bills.

“What [utilities] have to recognize is that their shareholders are the residents of Ontario,” she said. “Be it municipally owned, be it provincially owned, or even privately-owned … You make money through selling electricity – not fees.”