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Electricity Distributors Respond to Ontario NDP Press Release
Toronto – The Electricity Distributors Association (EDA), the voice of Ontario’s electricity distribution utilities, today provided the following response to Ontario NDP Leader Howard Hampton’s press release regarding “new hydro interest charges”.
In October 1999, the OEB issued its final decision on “Standard Supply Service” (SSS) which sets the framework governing the delivery and pricing of power to consumers. The decision identifies certain “implementation requirements” that electricity distributors are required to follow, including a detailed methodology for the pricing and procurement of SSS to different classes of customers, and the administration of the Purchase Power Variance Account (PPVA).
The OEB’s SSS decision requires electricity distributors to bill small consumers at the OEB-approved “fixed reference price”, the forecasted cost of power over the coming year. In the alternative, the OEB approved distributors’ applications to pass through to small consumers the spot market price of electricity and offer an equal billing program. These measures were put in place to protect consumers’ interests by providing smoothed electricity bills.
The OEB’s SSS decision also sought to protect consumers’ interests by requiring any difference between the actual cost of power purchased by the distributor, and the fixed reference price charged to small consumers, to be recorded in the PPVA.
The OEB requires distributors to apply an interest rate (set for each distributor according to a scale established by the OEB) to any balance captured in the PPVA, which came into effect with the opening of the competitive market on May 1. The PPVA is required to be “trued-up” (settled) periodically, in the form of a surcharge or, in case of a negative balance, a rebate to consumers.
In summation, in charging (or paying, as the case may be) interest on PPVA balances, Ontario’s electricity distributors are executing the Ontario Energy Board’s required methodology for pricing and billing small consumers who choose not to sign with a retailer.
Ontario’s electricity distributors are the publicly and privately owned companies that deliver power safely and reliably to Ontario homes, businesses and institutions. As the voice of Ontario’s electricity distributors, the EDA has raised, and is continuing to work with Ontario’s market overseers to resolve, serious ongoing concerns regarding financial aspects of the province’s competitive electricity market.
For more information contact:
Christine Hallas, EDA Public Affairs, at 416-484-5322
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