No hydro service causes expensive delays for Harrow, Ont. manufacturer
Sellick Equipment has been waiting a year for energy regulators to decide who will supply its hydro
Crippling hydro bills are a frequent complaint from industry in southwestern Ontario, but a forklift manufacturer in Harrow says the problem with their hydro bill is that they aren't getting one yet.
Electricity still hasn't been connected at Sellick Equipment's new 120,000-square-foot plant in Essex County, a year after they first requested service. Construction broke ground on the new facility in April of 2016.
Around that time the company also put in a request to their existing electricity provider, E.L.K. Energy, to connect the new location.
E.L.K. is the municipally-owned utility for many parts of Essex County, and currently supplies Sellick's existing smaller facility. The new location is just a short distance away, but is across the street from the border of E.L.K.'s service area, placing it in territory serviced by Hydro One.
Hydro One more expensive than local utility
Sellick asked both Hydro One and E.L.K. for cost estimates on connecting their new facility. According to filings with the provincial regulator, the Essex utility's estimated installation costs were 45 per cent lower than Hydro One's because they have existing facilities and transmission poles close by.
"It's sad that it takes that long for the Ontario Energy Board to make a decision, and not one time did the OEB ever ask or inquire ask or inquire as to when we needed power on site," - Ken Thoman , project manager for Sellick Equipment
In addition, Hydro One's ongoing monthly rate was estimated at about $1,000 more per month than E.L.K.
This led Sellick to ask E.L.K. to serve as their energy provider, a request that needed approval from the Ontario Energy Board.
That request has come with a nearly year-long delay, filled with hearings and regulatory filings between E.L.K., the OEB, and Hydro One.
Backup generators only a stopgap
Staff at Sellick are now concerned the increasing delays will end up costing them.
"I've got equipment on order ... I've already installed two five ton cranes. I can't even power them up," said Ken Thoman, the project manager for Sellick Equipment. "It's really thrown our timeline off."
Thoman adds that without proper hydro service, he can't safely accept deliveries of new equipment. Some of that equipment is due to arrive through ship transport in coming weeks, and cannot be delayed without costing hundreds of dollars per day, according to the company.
Comparing two providers 'difficult'
Regulations say transferring a service area from one provider to another shouldn't result in higher costs to the electrical system, and by extension, all other hydro customers. E.L.K. claims only Sellick would be affected by any changes, while Hydro One disputes this in their application to the regulator.
Energy board staff tell CBC News they are still deliberating and have to determine what's in the public interest, but a submission to the energy board several months ago indicates comparing E.L.K. to Hydro One would be "difficult, if not impossible."
Staff also submitted that the lower cost to Sellick should be taken into account in favour of E.L.K. Energy.
"We feel that the costs are lower and they've been a long existing customer of ours," said Mark Danelon, director of finance for E.L.K. Energy.
Delay is unusual
Staff with the Essex utility say they have previously applied to the OEB to change their service area and haven't faced delays like this.
"We're hopeful that the good news will come soon ... this is the first that we've experienced this timeframe," said Danelon.
Essex MPP Taras Natyshak has attempted to speed up the process and brought Sellick's case to the Minister of Energy.
"They're in a holding pattern, waiting for the OEB to make a decision," said Natyshak. "It looks like it could be another couple of weeks, up to nine more weeks."
Increased business costs
While the wait continues, Sellick's frustration that the OEB is not taking business needs into account continues to grow.
"It's sad that it takes that long for the Ontario Energy Board to make a decision, and not one time did the Ontario Energy Board ever ask or inquire ask or inquire as to when we needed power on site," said Thoman, adding that the situation is approaching a critical point and the company will need hydro by the beginning of May.
Thoman believes his struggle is indicative of wider problems for manufacturers in Ontario and doesn't believe he'd have similar issues elsewhere. "If an American company ... was having this problem getting power, I can't imagine," he said.
In a statement to CBC News, Hydro One said they're committed to working with Sellick to get them connected as quickly as possible, and will assess the OEB decision once it has been made.