Landlord refuses to pay 'exorbitant' hydro bill
Daniel Scenna refuses to pay a $25,000 security deposit to Kitchener-Wilmot Hydro
Dozens of Kitchener tenants could be cut off from heat and power because their new landlord refuses to pay a hydro bill he considers unfair and far too steep.
The city-owned hydro utility is demanding Daniel Scenna pay a $25,000 deposit -- or it will chop power to 68 units at 185 Kehl St.
The deposit is meant as insurance in case Scenna, a new customer who recently bought the apartment building for $4.1 million, fails to pay his future electricity bills.
"It's exorbitant," said Scenna.
Scenna said his credit rating is excellent and he's always paid his hydro bills at other buildings he owns in southern Ontario.
He says he did not plan to pay a steep hydro deposit in buying the building, he has not been made to pay a deposit like it at any of the other apartment complexes he owns in southern Ontario, and that paying the hydro fee may mean fewer upgrades for hallways, apartments and landscaping.
He also argues the city's demand for hydro deposits will discourage investors from buying buildings in Kitchener.
Anxious tenants hope the standoff is resolved before they find themselves in the cold and dark.
Kitchener-Wilmot Hydro had threatened to cut their electricity yesterday. That threat has been suspended pending discussions next week.
Richard Schwartz said he sympathizes with his landlord. He didn't like having to pay a hydro deposit when he was a tenant years ago.
"This is ridiculous, that amount," he said. "Twenty-five grand is a little steep."
Scenna pledged to end the standoff before tenants lose power. "They will not be in the dark," he said.
Calls to other utilities revealed Scenna would be asked to pay a similar deposit in Waterloo; but in Cambridge, deposits can be waived for new customers with good credit.
Kitchener-Wilmot Hydro defends its policy as good business. Until recently, it didn't demand such deposits from owners, because it could add any unpaid bills to their property taxes.
But deregulation prevents the utility from doing this. Now, it protects itself by asking owners for the same deposits it has always sought from tenants. For commercial customers like Scenna, the fee equals 2.5 months of heavy billing, regardless of their credit rating.
"It's important for us to make sure we have some risk mitigation," said Ron Charie, utility president. "I think we've always had complaints about deposits."
The utility estimates deadbeat customers cost it $200,000 a year, a cost passed to all other customers.
Customers get regular interest on their deposit, and the fee is returned to them on their final bill.