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Hydro Ottawa says don't blame us

Ottawa Citizen - October 30, 2002
by Randall Denley

Wondering why your electricity bill is so high? If so, you must be cut off from all sources of news and information, but not to worry. Someone is thinking of you.

Hydro Ottawa last week ran large newspaper ads explaining that there are two reasons for the higher bills. Reason one is the open market. Reason two is that more electricity was used.

Reason three, not stated, is that Hydro Ottawa itself has nearly doubled its fixed service charge and its delivery charge. The fixed charge used to be $7.52 for two months. Now it's $14.20. The delivery charge went from $7.10 per megawatt hour to $13.

Despite that, Hydro Ottawa's ad states "Hydro Ottawa's charge for delivering electricity to you has not changed." Deceptive? Not quite. The city-owned hydro company has found a technicality to spread the blame entirely elsewhere. You are meant to look at the chart that shows hydro prices rising since May and say, "oh, they mean it hasn't risen since May."

That's true, because Hydro Ottawa was able to grab its bigger bite of your paycheque before the latest round of madness hit.

Part of the purpose of the newspaper ads is to try to take some of the pressure off harried Hydro Ottawa employees, who are quite busy answering questions from irate power users. The local utility has had to hire 30 additional workers at its call centre, says Jeremy Byatt, vice-president of public affairs. The cost of electricity nearly tripled over the summer, and customers are "outraged" by the higher power charges.

You really can't win. If you complain to Hydro Ottawa about high rates, it costs you even more money because they have to hire extra employees to take the complaint calls and then run newspaper ads to tell you it's someone else's fault.

Hydro Ottawa spends about $350,000 a year on advertisements, Byatt says, but every time they run, people complain. It's probably natural to wonder why a power distribution monopoly needs to advertise. You might remember Hydro Ottawa's television ad campaign that showed faces of its employees. The message there was, "we exist." OK. Other ads have conveyed the message that "we aren't selling you anything."

Advertising is a difficult issue for the company, Byatt says. "When you don't sell a product, how much advertising do you do?"

The short answer ought to be not much, but perhaps an ad telling people something useful, such as the fact that the electricity price was tripling, might have been appropriate. It would have reduced the shock caused by the power bills.

Hydro Ottawa's higher costs are driven by a number of factors, Byatt says. It must now pay taxes to the provincial government and it has to pay interest on a loan to its nominal owner, the city of Ottawa. It's also expected to make a profit for the city. That profit will only be about $3 million this year, but is expected to rise to $15 million. Combined with interest Hydro Ottawa pays on an unnecessary loan from the city, the power company will be shipping $26 million a year to City Hall by 2004. That's straight from your pocket.

Hydro Ottawa now has a much more complex business to manage because it must bill on behalf of power retailers and calculate its own power cost, based on a market that fluctuates by the minute. In what will come to be known as the Light Ages, local power utilities used to buy power in bulk from Ontario Hydro at a fixed rate. Simplicity itself.

Hydro Ottawa and all the other players in the system have spent a lot of money to turn themselves into businesses, but there's still no real marketplace and no competition, because demand exceeds supply.

Hydro Ottawa has done its bit to sink its fangs into you, but it's only a bit player in this farce. Let's be totally clear. The reason your power bills are astronomical is because the Ontario government, and all of its predecessors, have made a total mess of running the provincial power company. Not only have they buried it in $38 billion of debt, they haven't even been able to assure adequate supply. There are threats of brownout and blackouts ahead. Short of a reactor meltdown, the provincial government couldn't have done much worse.

Maybe Premier Ernie Eves's strategy is to hope to escape blame under cover of darkness. Thanks to the masterminds in government, we're likely to have a lot more of it. Welcome to the Dark Ages.

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