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Centralization plan has ramifications for Waterloo North Hydro

Local electricity distribution companies (LDCs) all across the province are expressing their disappointment with the Ontario government’s decision to pull program delivery currently given to customers from LDCs in favour of a centralized delivery model.

Bill 87 also announces the cut of many conservation programs, including the pool saver program, which offered pool owners a $400 rebate for upgrading to energy-efficient pumps. Waterloo North Hydro is one of the companies affected by these changes.

“Waterloo North Hydro, like all local distribution companies, was caught by surprise with Bill 87 and the announcement of cancelling conservation and demand management programs delivered locally by LDCs,” said Rene Gatien, WNH president and CEO. “We were in the middle of a conservation-first framework that was supposed to finish at the end of 2020.”

The provincial move is expected to have an impact on local jobs at the LDCs, as conservation programs to reduce energy waste have created 5,000 jobs across Ontario. Gatien added the goal of these programs are intended to help customers lower their energy bills.

The Electricity Distributors Association, the umbrella group that represents independent LDCs such as Waterloo North Hydro, argues the new bill dismisses the work and savings that LDCs have contributed, as well as creating a much less personalized atmosphere for customers.

“LDCs have built relationships of trust with the people they serve, and customers have high satisfaction with LDC-led programs to reduce energy waste and lower their bills,” said Brian Wilkie, CEO of Niagara Peninsula Energy Inc. and chair of the EDA, in a release. “Our customers will now lose their opportunity to work closely with a local provider that understands their requirements.”

“The Ford government has a ‘cuts’ agenda, not a ‘subsidy’ agenda,” said Gatien.

“We are very disappointed to see our customers that we know locally become ‘ratepayers’ that look to a Greater Toronto Area centred agency for local CDM programs,” added Gatien.

According to the Independent Electricity System Operator (IESO), the body that manages the provincial power grid, LDCs have saved more than 5.8 billion kWh, enough to power some 640,000 homes for a full year. Incidentally, the IESO, a Crown corporation based in Toronto, will be responsible for the new program delivery.

Conservation programs that will be centrally delivered by the IESO include the retrofit program, small business lighting, energy manager program, process and system upgrades, industrial accelerator program, energy performance program, home assistance program and targeted programs for on-reserve First Nations communities.

Such incentives have proven to be an effective way to ensure people stay energy efficient.

The Ford government claims that the proposed changes could “save electricity customers and taxpayers up to $442 million over the next three years.” In a release, it maintains the amendments would have no impact on the environment, reduce hydro rates for medium and large employers, and increase competitiveness and opportunities for growth.

“Our government is building an electricity system that works for the people, and that starts by cleaning up the mess we inherited,” said Minister of Energy, Mines, Northern Development and Indigenous Affairs Greg Rickford in a release. “We are taking a comprehensive, pragmatic approach to building the modern, efficient, and transparent electricity system that the people of Ontario deserve.”

It also proposes a variety of other terms, one of which is overhauling executive compensation of Hydro One and “terminating more than 750 unnecessary renewable energy contracts, avoiding $790 million in costs.”

Other groups had a less favourable view of the changes. While Gatien agreed that some of these programs had run their course, there were other routes to take than at the LDC level.

“The Ford government has a ‘cuts’ agenda, not a ‘subsidy’ agenda,” said Gatien. “We can understand that to some extent. However, they have gone after cuts at the LDCs, which is the smaller part of the electricity bill. The largest part of most customer bills is the energy portion, and the energy portion has increased significantly more than inflation year over year. The LDC portion has been in line with inflation.”

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