Doug Ford scrapping rate protection for more than 325,000 Ontario hydro customers

Posted January 22nd, 2018

Premier Doug Ford’s government is scrapping legislation that aims to regulate the price of electricity for more than 325,000 hydro customers in Ontario.

The move has sparked fear among low-income advocates, tenants and condo owners that electricity costs could rise for anyone who pays for their hydro through a sub-metering company.

“We don’t have any control,” said Angie Toussaint, a low-income tenant who lives in Toronto’s Jane and Finch neighbourhood.

“For someone who is single you feel like you’re going out of your mind because you have other bills to pay as well,” she said.

Toussaint works as a cook for a Toronto catering company and like many, she worries about increasing rents, rising electricity costs and stagnant wages.

In 2018, she got assistance through the Ontario Electricity Support Program — about $45 a month toward the cost of her electricity. She says her bills are currently under control, but fears removing price protections for customers could change that.

She’s also had major problems with her landlord and sub-metering companies in the past, including when she says her landlord switched her building from one sub-metering company to another without residents’ consent.

“I said what is this?” Toussaint said. “How come no one ever informed me I was going over to a new company?”

The changes proposed by the Ford government were announced last December as part of its Restoring Ontario’s Competitiveness Act — or Bill 66 — and have all but killed a year-long process started by the previous Liberal government and the Ontario Energy Board (OEB) to regulate prices in this sector.

In 2018, she got assistance through the Ontario Electricity Support Program — about $45 a month toward the cost of her electricity. She says her bills are currently under control, but fears removing price protections for customers could change that.

OEB spokesperson Mary Ellen Beninger says if Bill 66 passes as currently written, the OEB will “discontinue” this process, formally ending its efforts to control prices charged by sub-meterers.

The changes will affect the roughly 325,000 residential and business customers who pay for their electricity through a unit sub-metering company.

Changes could leave customers ‘vulnerable to exploitation’

Sub-metering companies allow landlords to shift the cost of electricity to tenants and condo owners by installing “suite-meters” in each unit, rather than having a single meter for the entire building.

As a result, landlords and property managers no longer have to pay one large bill for the buildings they run. Tenants, meanwhile, are given greater control over how much electricity they use and have more reasons to save and conserve.

But low-income advocates who spoke with Global News say the government’s proposed changes could lead to higher electricity bills for hundreds of thousands of customers in Ontario. They also fear the move will mean less oversight, less transparency and fewer consumer protections for those who need them most.

“For a government that talks about looking out for the little guy, this one sticks it to the people and gives benefits to big companies, large property owners, and leaves tenants vulnerable to exploitation,” said former Toronto city councillor Janet Davis.

Davis has long advocated for more affordable housing in Toronto. She pushed Toronto city council to look at the activities of sub-metering companies and thinks Ford’s decision to scrap legislation in this area will leave a “huge gap” in the regulatory framework meant to protect Ontarians.

Rather than scrap regulations, she thinks the government should give the OEB more authority — not less.

“[These companies] have slipped in with very little oversight and regulation,” she said. “They’ve managed to provide for themselves additional ways to make money off the backs of tenants.”

“Half the people in Toronto are tenants and they have the ability to use their voices if they understand what’s going on,” she said.

Changes will ‘reduce burden’ on sub-meterers

In October 2017, then-Energy Minister Glenn Thibeault ordered the OEB to start regulating prices charged by sub-metering companies.

The OEB launched a consultation to decide how best to do this, but the process was not finished before the provincial election last June.

Then, in December, Ford laid out his plan to strip the OEB of its authority to set prices for sub-meterers. At the time, the government said this move would “reduce the regulatory burden” on sub-metering companies, saving them roughly $1.3 million a year, while also creating “greater confidence” for investors in this growing segment of Ontario’s energy economy.

“In the dying days of the previous government, the Wynne Liberals made a misguided commitment that would have raised electricity bills for low-income tenants,” Ontario Energy Minister Greg Rickford said in an email statement sent to Global News.

According to Rickford, regulating what sub-metering companies charge would have increased hydro rates by introducing burdensome regulations and unneeded costs that would then be passed on to consumers.

He also said sub-metering companies operate in a “competitive” environment that keeps costs low.

“The failed record of the previous government to deliver real hydro relief for Ontario families, businesses and seniors speaks for itself,” Rickford said.

Meanwhile, Chris Holz, a spokesperson for the Sub-Metering Council of Ontario, said in an email statement sent to Global News that it’s untrue Bill 66 will lead to higher costs.

Once passed, he says the Bill will remove an unnecessary layer of red tape and enhance competition among sub-metering companies.

“Since April 1, 2018, Ontario’s sub-metering customers have been forced to pay for the OEB’s expanded mandate,” Holz said. “Should Bill 66 pass, we hope the Board will eliminate this unnecessary cost to our customers.”

Companies free to charge whatever they want Despite Rickford’s assurances that costs will remain low, once passed, the changes in Bill 66 mean sub-meterers in Ontario will be free to charge customers whatever they want.

This has low-income advocate Mary Todorow worried. “This decision needs to go back to the drawing table,” said Todorow, a policy analyst at the Advocacy Centre for Tenants Ontario (ACTO).

Through her work at ACTO, Todorow has dealt with a lot of customers who have struggled with their sub-meterer. While she says existing tenants whose electricity is already included in their rent must provide written consent before they can be signed up with a sub-metering company, anyone looking for a new apartment or buying a condo has no say in whether they sign up.

This is a sort of “take it or leave it” situation, she says. “It’s a very tough rental market here in Ontario,” she said. Vacancy rates for apartments in Ontario are at a 10-year low of about 1.5 per cent, according to the Canada Mortgage and Housing Corporation. Todorow says this makes many tenants feel reluctant to move, even if their housing is inadequate.

The prospect of paying for electricity separately from rent makes this worse, she says. “Tenants are scared to move because the rules are once a unit is vacated, a landlord can charge whatever the market, a tenant, is willing to pay,” she said. “What this means is that tenants have less and less choice in terms of accepting the lease arrangement.”

For Toussaint, the prospect of rising electricity costs is a scary one. “Tomorrow morning I can wake up and hear this is all removed,” she said. “When they take you by surprise, what are you left with? You are left with having to run from point A to point B to find out how am I going to manage.

“We need protection,” she said.

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Article by Brian Hill and Jamie Mauracher for Global News

 

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