QUESTION

Why is the delivery charge for seasonal Hydro One customers double that for residential owners? We barely use our cottage in the winter and our bill still remains ridiculously high. We keep the furnace low and use the fireplace to heat the cottage when we are there. 

Justine Hew, Sundridge, Ont.

ANSWER

Every Hydro One customer pays the same amount for the electricity they use. However, the cost of delivering that electricity to your cottage (listed on the back of the bill, under the delivery section) is comprised of a fixed delivery charge and a fluctuating volume charge. Hydro One divides non-industrial customers into four different classes – residential, seasonal, small business, and farm --– and charges vary between them. Within classes are further divisions, so seasonal customers, for instance, are split according to the costs associated with servicing them. The fixed delivery charge for cottagers (who fall within the seasonal-customer class) ranges from $18.77 to $35.54 per month. Residential customers, on the other hand, pay anywhere from $13.60 to $28.30 per month.

The Ontario Energy Board, a provincial agency that regulates the electricity and natural gas industries, and Hydro One reason that the cost of delivering electricity to some customers is more expensive (they have farther to go for maintenance, service calls, and the like) and say those customers should bear the expense. Utilities, no doubt, love fixed charges because they guarantee a dependable revenue stream regardless of a customer’s electrical usage. And that’s the problem, according to John McGee, who oversees the Federation of Ontario Cottagers’ Associations hydro file. While McGee doesn’t think the dollar amount is unfair, he says the fee structure is counterproductive. “We want to have a conservation culture,” says McGee. “And one way to do that is to charge people more for usage and less for fixed costs.” McGee says fixed costs don’t reward people for reducing their energy usage and that’s wrong. 

Steve Brearton

Published in the March 2007 issue of Cottage Life.