Province-wide winter hydro disconnection moratorium leave utilities in 'cash flow pickle'
This is the second winter utilities are banned from cutting off electricity to customers who don't pay
As of today, it's illegal for an electricity company to cut off your power if you don't pay your bill.
This is the second year of the province's winter hydro disconnection moratorium, which goes from Nov. 15 to April 30.
Wendy Watson, director of communications for Greater Sudbury Utilities says when the moratorium ended last spring unpaid bills totalled $400,000.
But as people paid their bills over the summer to get their electricity turned back on, that number has now dropped to $150,000 as the moratorium takes effect again.
"And with the moratorium we know that is going to go up again, possibly triple. The only leverage that we have in order to collect bills is the threat of disconnection," says Watson.
She says that only about 16 per cent of each hydro bill stays with the local utility and that during the winter months it's sometimes tough for hydro distributors to pay the remaining 84 per cent to the companies that generate the power in the first place.
"We are not the only distribution company that ends up in a cash flow pickle because of this," says Watson.
Unpaid bills could lead to rate hikes
After the first year of the moratorium, a similar pattern has been noticed at PUC services in Sault Ste. Marie.
"There are a growing number of people that have trouble paying their bills, so the amount of bad debt we carry grows throughout the winter and there's kind of a catch-up in the spring," says Giordan Zin, PUC's manager of customer engagement and corporate communications.
Zin says that bad debt from years of unpaid hydro bills will eventually have to be covered by people who do pay their bills, which could force utilities to raise electricity rates, and ironically make it even harder for people with low income to pay for power.
Watson says Greater Sudbury Utilities currently is owed $100,000 from accounts that are now closed, meaning those cases are being turned over to a collection agency, but other customers may have to eventually cover that debt.