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Westario Power disconnect
policy explained

By Liz Dadson

Kincardine council

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Westario Power's disconnect policy was explained to Kincardine council last night (March 5), but it didn't sit too well with some councillors.

Randy Hughes, Kincardine's representative on the Westario board of directors, gave his presentation in committee-of-the-whole.

He said that despite reports to the contrary, a residential electrical disconnect is a very rare event, but it does occur.

"I can assure everyone that Westario Power does not want to disconnect a customer at any time, winter or summer," said Hughes. "Westario Power is in the business of supplying electricity to consumers so it is very much in the business' best interests to keep the 'lights on'."

He said no one is disconnected without given several opportunities to resolve account arrears.

The official policy states the following, using a January electrical bill as an example:

Disconnection timeline (example: Jan. 1-31 billing period

  • Jan. 1-31 - consumption
  • Feb. 12 - bill issued
  • Feb. 28 - bill is due
  • March 5 - reminder notice
  • March 12 - final collection notice
  • March 22 - disconnection process may be started
Hughes added that customers who are registered as requiring electricity for life support have an additional 60 days to make repayment arrangements.

"At any time during the process, the customer can contact Westario Power and request assistance," he said. "If customers notify Westario Power that they are seeking social assistance to help in their bill payments, the disconnection process is suspended for 21 days."

He stressed that nobody wants to be without electricity during the winter. "Unfortunately, for the majority of customers who have received recent disconnect notices, they were already in arrears well before winter."

In addition, Hughes pointed out the following facts:

  • The Ontario Energy Board and the Ontario government state that electricity is not an essential service.
  • Westario Power does not set electricity prices; that is done by the Ontario Energy Board
  • Westario Power's disconnection policy is comparable to other local distribution companies in Ontario
  • Westario Power is solely responsible for bad debt and cannot pass along bad debt-carrying costs into its rates
  • Westario Power makes every effort to not disconnect a customer; a disconnect is performed only if all efforts to work out a repayment plan with the customer have failed
  • A residential disconnect due to arrears, typically does not occur until an account has been delinquent for two to three months; the very few customers who were disconnected in February, 2014, had been in arrears since October. 2013; customers went into the heating season knowing they were behind in payments
  • Actual electricity consumption represents only six per cent of a typical electricity bill; the delivery charge is 18 per cent; the remaining 21 per cent of the bill includes taxes and fees not directly related to the supply or distribution of electricity
  • Local distribution companies, such as Westario Power, bank-roll the entire electricity market and are financially responsible to the Independent Electricity System Operator for the on-time payment of all electricity distributed
  • Westario Power customers are encouraged to review their payment options and consider "equal billing" as a tool to help manage their budget

Hughes offered some short-term actions/options for consideration:

  • Kincardine's director (Hughes) would continue to work with Westario Power through the board of directors to improve customer support and education for customers - a new manager of customer support began work at Westario Power March 3
  • With direction from council, Hughes would initiate a board motion to suspend winter disconnects, with Westario Power underwriting the financial risk - which has a one-in-nine-chance of being approved by the board
  • With direction from council, Hughes would initiate a board motion to suspend winter disconnects, with the municipality underwriting the financial risk, through a Vital Services Bylaw - funded through the municipality's dividends from Westario Power

Mid- to long-term actions/options to consider:

  • Lobby the energy minister to declare electricity an essential service
  • Lobby the provincial government to provide more tax-dollar support to help needy households pay energy bills
  • Ensure the provincial government is aware of the increasing hardships placed on residents due to rising energy costs

Hughes said the winter of 2013-14 has been the coldest in 20 years which, along with rising energy costs, is causing hardship for many people.

"And it's just going to get worse," he said, "as we have colder winters and higher hydro bills."

Councillor Jacqueline Faubert said there are a few areas where Westario Power could help ease some of the burden, including the reconnection charge of $65.

"Prior to disconnection, Westario Power is on-site and the customer can make payment right there, and the disconnect doesn't happen," said Hughes.

"But a $65 charge on top of everything else," said Faubert. "That's redundant and kind of mean."

 

"Westario Power does not disconnect if the customer has made arrangements to pay his bill," said Hughes, "but there is a cost for Westario Power to go out and disconnect the service."

"Plus, there's a charge of $17 for hand-delivering a disconnection notice?" asked Faubert.

"That's not part of the policy," said Hughes. "I can look into that."

"What are the 'cons' of suspending winter disconnects?" asked deputy mayor Anne Eadie.

"Westario Power cannot support taking on the risk," said Hughes. "Plus it hurts the customer because he's just getting further into debt and digging a bigger hole."

"I understand that from a business point of view," agreed Eadie. "This is more of a social services issue."

"Westario Power can do a better job of educating and informing the public about payment options, such as equal billing," said Hughes. "Nobody wants to go into the winter season not being able to pay their bills. But often people know they're going to be in trouble, because they've been in trouble since October."

"There should be no disconnect if there is funding available (through social services)," said Eadie.

"Not all disconnects are because of a needy family," said Hughes. "Some people just don't want to pay their bills."

"My concern is not for the able-bodied individuals who can go to work," said councillor Ron Coristine. "I'm concerned about the seniors and women and children. If we push the compassion card out of the deck, we no longer have a sustainable society.

"When people fall into difficult circumstances, through no fault of their own, we need to help them; we can't just let them freeze to death in the middle of winter."

Councillor Kenneth Craig asked what council was going to do with Coristine's motion which was deferred from the Feb. 19 meeting.

That motion called on council to direct staff to write to Westario Power's board of directors this week to request that Westario amend its business practice as soon as possible to disallow any electricity disconnect during the winter heating season, Dec. 1 to April 1; and that Westario advise its investors of this change and its inception date.

"I have a lot of sympathy for Westario Power, and other companies in this situation," said mayor Larry Kraemer. "The issue of collecting bad debts and arrears is difficult for all companies."

He said the provincial government has not been responsible in keeping hydro rates down and that, plus the incredibly cold winter, has exacerbated the problem for many people, particularly those who are legitimately disadvantaged.

Craig suggested council direct staff to send a letter to the province, urging the government to provide more social service dollars to assist households pay their energy bills; and ensure the province is aware of the increasing hardships placed on residents due to rising energy costs.

"My experience has been that the provincial government does not open its mail," quipped Coristine. "We need to do something more direct."

Craig again asked what council was doing with Coristine's motion. When the vote was called, the motion was defeated.

Council agreed to have staff bring forward a report on the issue in April.



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Wednesday, March 05, 2014