Cottagers are anxiously awaiting answers after Hydro One warned seasonal customers that electricity costs could increase dramatically if the Ontario Energy Board (OEB) decides to eliminate the seasonal rate class.
The OEB determined in 2015 that Hydro One’s seasonal class should be eliminated and existing seasonal customers reclassified according to the density of their location. The OEB asked Hydro One to develop a report on eliminating the seasonal rate class in 2015 and again in 2016. Vice President of Customer Care Imran Merali sent a letter to Hydro One seasonal customers last week, warning of possible price increases and highlighting the company’s efforts to voice their concerns about the change.
The company submitted an updated report to the OEB on July 19 this year, detailing how the elimination of the rate class would have a negative effect on over half of their seasonal customers. The company also presented an alternative solution, aiming to protect the majority of seasonal customers that do not qualify for the subsidies available for year-round residents. Merali said in the letter that the company expects to receive the OEB’s decision soon.
“We anticipate that the OEB will request us to send a notification on their behalf regarding this matter shortly,” Merali said in the letter. “As part of the OEB process, we believe all seasonal customers will have the opportunity to participate in the review of the updated report. We encourage you to understand how you may be affected if this rate class is eliminated and provide them with your feedback.”
Most cottagers will be shifted to the R1 (medium-density) or R2 (low-density) class, depending on the location of their cottage. About 54 per cent of customers could see their bills increase, some by as much as 129 per cent over the next few years, according to Hydro One. Because the OEB only allows Hydro One to increase bills by 10 per cent a year, the change would happen incrementally, but once the transition to the new rate is complete, the company said it could cause some customers to pay nearly $1,000 more each year. Fewer than one per cent of seasonal customers would see monthly bill reductions of around $30, while the rest would save about $7 a month.
Rob Allan and his family have a cottage on Grandview Lake just outside of Baysville. His wife’s family bought the cottage 60 years ago when the lake was empty and it’s been passed down through the generations ever since. It’s a simple 600-square-foot cottage with three bedrooms, a two-piece bathroom, a kitchen and a living room with some land on the lake.
“There’s no satellite dish, there’s no internet,” he said. “We get one TV channel and we’re quite happy.”
Allan said the family has worked hard on energy conservation in the last 10 years, cutting their bill in half. They turn off the electricity in the winter but still have to pay for the transmission costs, so he’s frustrated that despite their work to conserve energy, their hydro costs could continue to rise.
Allan is also retiring in six months, adding to the stress of higher expenses. He said there are at least five or six people on the lake that may not be able to stay if costs rise due to their fixed incomes, but he also worries about cottage rentals and what the costs could do to tourist traffic and revenue.
“I know people that are almost at the breaking point now,” Allan said. “If they’re going to have to raise the rental rates, people are going to stop renting.”
The Federation of Ontario Cottagers’ Associations (FOCA) expects the OEB to issue a decision later this month, according to a statement on their website. They ensured members that FOCA will be advising them of the ruling and undertaking “whatever opportunity is available to intervene with the OEB to represent the interests of our members.”
For more information about the possible changes or to contact Hydro One, visit their website.