London Hydro to repay $3.5M

New rules will force it to give back security deposits and crack down on delinquents

London Free Press - February 11, 2004
by Jonathan Sher

Changes in Ontario regulations will force London Hydro to refund $3.5 million in security deposits and crack down on those who don't pay their bills.

New rules by the Ontario Energy Board limit the amount of time utilities can keep security deposits from customers who pay their bills.

London Hydro will have to refund deposits to residential customers after one year -- twice as quickly as the utility now does.

Commercial and industrial customers will see an even bigger change, getting their deposits back after five or seven years, depending on their size. Now, those deposits are held indefinitely.

While the energy board gave utilities until next February to comply, London Hydro will act quickly with refunds as soon as the summer, said Vinay Sharma, vice-president of customer services.

The total payout is expected to be about $1.5 million for residential customers and $2 million for other customers.

With less money in the bank to offset the losses that occur when customers don't pay, Hydro will be quicker to demand security deposits from customers who miss payments, Sharma said.

"We're going to have to be more vigilant in our collections," London Hydro chief executive Bernie Watts told his board yesterday.

Those who have had past payment problems will be asked to pay a deposit if they miss paying a single bill, while those with clean records will have to pay after two missed bills, Sharma said.

The new rules replaced a hodgepodge of rules created by utilities. The maximum security deposit allowed is 2.5 times a customer's average monthly bill and interest on that amount must be paid out at least once every 12 months.

New customers can avoid paying a deposit by providing a reference letter confirming their good standing with their previous utility or by paying to send the utility a credit check.

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