Stopping winter hydro disconnections may increase your bill
Hydro companies says people will accumulate thousands in debt that other customers will have to pay for
A push from Ontario's energy minister to stop winter disconnections could cause hydro rates to increase, according to some utility companies.
Last week, minister Glenn Thibeault wrote a letter to all hydro companies asking them not to cut off the hydro to residents having trouble paying their bills during the winter.
Now he says he'll put through legislation this week to force electricity companies to comply.
In Ontario, a hydro company can disconnect people's electricity if they aren't paying their bill, provided it gives them at least 10 days warning.
Until last week, companies like Greater Sudbury Utilities would disconnect homes — unless the temperature dipped below -20 Celcius.
Winter disconnection ban failed in 2002
Disconnecting the power is one of the only ways for hydro companies to prevent someone from racking up hundreds, even thousands of dollars in unpaid hydro bills, according to Sudbury utility spokesperson Wendy Watson.
Watson says that was the case when the province banned cold-weather disconnections during the winter of 2002-2003.
"What happened then, is there was no way they could pay their bills. They defaulted, we had to write off a whole bunch of bad debts," she said.
"That impacts the 99.9 per cent of the customers [who] pay their bills on time, because then we have to write-off those bad debts, and that affects everyone's rates. It causes the rates to go up," she said.
"It's not like a car dealership where you have a car payment, and if you default on the payment, they're going to come and grab the car. We can't do that with [electricity]."
Real issue is commodity price, utility says
Smaller utilities could have a particularly difficult time absorbing bad debt, according to Giordan Zin, who is with PUC Hydro. The electricity supplier for Sault Ste. Marie and Espanola has fewer than 40,000 customers combined.
When people don't pay their bills in Sault Ste. Marie, Zin said PUC uses 'load limiters' to allow only a small amount of electricity into the home. In Espanola, the company does disconnect power unless it is below -10 degrees Celcius.
"We're not Hydro One. We're not a massive conglomerate. Taking a hit like that will be challenging," he said.
"Nobody wants to get disconnected in the winter. But it doesn't solve the problem. We're just kicking the can down the road. If they want to provide real relief for Ontarians, it's addressing the rising [commodity] price of electricity that's gotten out of control."
The minister's decision to target companies who disconnect power is a band-aid solution, according to Joseph LeBlanc, executive director of Sudbury's Social Planning Council.
The charity, which provides emergency funds to people who can't pay their hydro bill, receives dozens of applications every year from people in the city who are at risk of having their power cut off.
LeBlanc said he's concerned a moratorium on winter disconnects could cause major issues when the weather warms up.
"I think [people] will be cut off in the spring, without addressing the income security issue. Yes, it would alleviate people freezing to death, but I don't think that's where the line is in Ontario 2017," he said.
The real solution needs to come from making sure people are being paid enough to pay their bills in the first place, he said.
The Ontario Liberals hope to pass legislation banning cold-weather disconnects by next winter.