Don’t panic.
Those might be useful words for people who heard the Oct. 15 announcement that hydro rates are going up 10 per cent.
But it is not as bad as it might seem.
Centre Wellington Hydro General Manager Doug Sherwood said in an interview last week the rate increase is only for the energy portion of the utility bill.
Centre Wellington Hydro also includes sewer and water charges on its bills, but Sherwood emphasized that only the energy portion is affected. He said people might look at the total of the bill, calculate ten per cent, and fear major increases are coming.
In fact, he said, the average household will be receiving an increase of about $2.40 per month.
The Ontario Energy Board announced the increase, and stated the new rates will be 5.6 cents per kilowatt hour (kWh) up to 1,000kWh per month, and 6.5 cents per kWh thereafter.
But Sherwood said there are very few people who will be paying even the 6.5 cents for extra use because the average home will use between 750 and 1,000kWh per month.
The announcement will also likely bring a large number of independent contractors into communities everywhere, offering contracts for electricity rates for up to five years.
Those rates usually start much higher than those charged by local utilities, but once people sign contracts, they are locked into those contracts for five years, and in some cases, they have been forced to pay hundreds of dollars more for the same amount of power the local utility provides.
For example, the rate charged by Centre Wellington Hydro since the market was deregulated and private contractors started offering contracts was 5.9 cents per kWh in 2002, and in the following years it averaged: 5.67 cents, 5.19, 6.57, 5.08, 5.48, and 6.48 last year.
Many of the private contractors start their rates at well over the average local utilities charge. Once people sign those contracts, they are literally locked in.
Last year, that prompted Centre Wellington and Wellington North Hydro to jointly publish consumer advertisements in The Wellington Advertiser to let customers know their rights when it comes to purchasing from a retailer.
First, they stated they had no representatives knocking on doors selling electricity contracts.
That advertisement added the two utilities do not know the terms of any contract a customer signs with a retailer, and those are strictly between the retailer and the customer.
“If you have a contract with a retailer of electricity, their company and toll free number will be displayed on your hydro bill. Contract the retailer directly about your contract details.”
The advertisement added customers should know their rights and if someone comes to the door selling electricity, the homeowner has the right to ask for photo identification and to ask what company the caller represents.
The advertisement suggested customers compare prices and know what they are signing. The new rate increase from the OEB announcement is 5.6 cents and 6.5 cents per kWhour. Residents should compare that rate with the rate being offered by a retailer.
The hydro companies also suggested customers read all the fine print before signing a contract, and understand what they are committing themselves to.
It warned that some customers have had to pay up to $1,000 just to get out of contracts. It also warned that if an existing contract is coming due, the customer should read the fine print to determine if some action is needed.
It also warned if the customer receives a cheque in the mail, that homeowner should read all the terms and conditions before cashing it.
The advertisement also noted that the Ontario Energy Board licences all gas marketers and electricity retailers, and those business must use fair marketing practices.
That means they cannot pressure a customer, they must immediately identify whom they represent when asked.
Any deviation from those rules and the homeowner can report them directly to the Ontario Energy Board.
The consumer laws allow people to cancel a signed contract within ten days of signing it. However, the customer may not know the effect of the new contract until approximately 45 days after signing that contract – when the next utility bill arrives.
To contract the Ontario Energy Board, mail to Ontario Energy Board, Box 2319, Toronto, ON, M4P 1E4, or visit www@oeb.gov.on.ca, or call toll free at 1-877-632-2727, or email complaints@oeb.gov.on.ca.
