On May 31, 2017, the Ontario Government passed Bill 132, which is intended to implement the Government’s promised Fair Hydro Plan (discussed in earlier posts, here, here and here). The main part of Bill 132 is the Ontario Fair Hydro Plan Act, 2017, which is included as Schedule I and is referred to as the Fair Hydro Act, 2017 .
As discussed earlier, the Fair Hydro Plan will lead to an immediate 25% reduction in electricity bills as of July 1, 2017. This is to be achieved through refinancing a portion of the Global Adjustment, shifting the cost of the Ontario Electricity Support Program and Rural or Remote Rate Protection Program (RRRP) to be funded from taxpayer dollars and rebating the provincial portion of the HST. On June 15, 2017, the OEB posted a lengthy article explaining the ways that Fair Hydro Act, 2017 will affect different parts of electricity bills, starting this summer.
In mid-June 2017, the Government released new and updated regulations to implement the Fair Hydro Plan.
Two new regulations are being issued under the Fair Hydro Act, 2017 to set out the manner in which the OEB is to adjust customer charges, and to specify information to be included on customer electricity invoices.
- The first of these new regulations is titled "Fair Adjustment Under Part II of the Act” and sets out the manner by which the OEB will calculate new rates that will result in a 25% reduction to regulated rate customers’ bills, as compared to their previous bills. The new rates will be effective on July 1, 2017. The new rates will be predicated on a set of stated assumptions (including that the customer uses 750kWh per month, is a residential customer of Toronto Hydro and consumes 65% of electricity during off-peak periods). The regulation also indicates that for next year the OEB will set new electricity rates to be effective May 1, 2018 that will result in an electricity bill increase equal to the rate of inflation.
- The other new regulation under the Fair Hydro Act, 2017 is titled "Invoicing Requirements." It sets out wording that must be included on distributors’ and unit sub-meterer’s invoices describing the Fair Hydro Plan. The new regulation also requires that distributors and unit sub-meterers who issue a paper bill to customers must provide a bill insert once each quarter that includes specified wording and information about the Fair Hydro Plan.
Additionally, changes are being made to existing regulations under the Ontario Energy Board Act, 1998 and new regulations are being issued under that statute.
- The Information on Invoices to Certain Classes of Consumers of Electricity Regulation is being updated to remove the prior requirement to include information about the debt retirement charge exemption.
- The Rural or Remote Electricity Rate Protection Regulation is being updated to reflect and implement the planned changes to the RRRP (discussed here).
- The Distribution Rate-Protected Residential Consumers Regulation is a new regulation that will implement the expansion of the RRRP to additional customers served by distributors with the highest rates (typically in northern Ontario).
- The First Nations Delivery Credit (On-Reserve Consumers under Section 79.4 of the Act) Regulation is a new regulation that will effectively eliminate the delivery charge for all on-reserve First Nations residential customers and remove the monthly service charge for customers of licensed distributors which charge a bundled rate.
The Fair Hydro Act, 2017 and supporting regulations come into force on July 1, 2017.