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Frequently Asked Questions
Why fix something that is not broke?
Something was broke – Ontario Hydro was in debt to over 90% - over 40 billion dollars. The
Province of Ontario had to do something about it because they were backing all Ontario Hydro Debt.
I hear Mr. Wilson saying that it is the Municipal Utilities fault for what might be rising costs.
False – Municipalities operated
for years with no debt and working under 15% of the cost of your light bill. With that 15% they paid for all lines within the municipality, office, billing, labour, promotion, maintenance and improvements
within your utility. The fact is that we are now faced with, as a result of Bill 35, with shares now to be paid, interests, corporate taxes, additional municipal property tax, increased billing costs to permit
retail metering, more levels of jurisdiction, OEB costs, plus the Ontario Hydro debt.
Are there going to be any rate shocks?
Yes – certain classes or ranges of customers depending on use will have more dramatic
increases than others.
Why?
Because the present rate process has not been tested and not thought out and we have a template that for standard supply the
utilities must follow
What happened our old municipal hydro (Beachburg, Killaloe, Mississippi Mills, Pembroke)? Were they not all paid for?
Bill 35 –
an Ontario Government Bill stated that we must form one company under the Ontario Business Corporation Act that would only provide the services, transformers, lines, etc., and associated noncompetitive
functions. Any item that could be considered competitive was to be put in a separate company. In this company we put rental items, etc.
We therefore set up two companies, the Ottawa River Power Corporation and the Ottawa River Energy Solutions.
How did you choose the name? Why not call it Pembroke Power Corporation?
The name was suggested by Charles Cote, a
commissioner from Arnprior and agreed to by the committee studying amalgamation of utilities in the County. We wanted a name that did not have the name of any particular utility in the amalgamated group in
it. Later many of the other utilities sold off to Ontario Hydro rather than join as discussed.
Why did our utilities not sell?
There were a number of reasons but it was primarily for accountability, long term gain in continued
municipal revenue verses passing it off to the government of Ontario, meeting local needs and maintaining our heritage. Past experience illustrated that a local operated utility had better control of
finances and it was felt that at the time of the decision it appeared that the Government of Ontario were preparing Ontario Hydro for resale into the private sector where we had absolutely no control
Did anyone study options?
Yes there were several over the past several years dating back to the MacDonald Commission
Who owns Ottawa River Power Corporation?
The Village of Beachburg and the City of Pembroke presently own 100% of the shares.
Additional shareholders joining the utility are the Municipalities of Killaloe and the town of Mississippi Mills. The utility is basically owned by the taxpayers of the municipalities. This is your utility.
I hear that the utility is set up with a debt. Why a debt when the utilities were paid for?
The
debt structure is set up as 50% of the net book value is shares and 50% debt. The municipalities hold both the shares and the debt. The shareholders agreement is set up that the new Company will pay
9.88% return on the Shares and a interest on the debt of 7.25% (first year). The return on the shares is dependent on the performance of the Company however the interest on the debt must be paid quarterly to the
municipality. The 50/50 debt is set up to provide the maximum return on the shares considering tax implications.
What will the municipality do with the returns on their investment?
The municipality can put the funds to what ever they wish to off set
downloading from the Province or for whatever project they wish.
Did the Municipal Hydros pay taxes before?
No, MEU's only paid a municipal tax in lieu.
What do the utilities pay as corporations that were not paid before?
We now must pay Corporation Taxes – 43% of all profits, property
taxes, OEB License & all costs of the OEB which are adjusted as their costs increase, (OEB cost must be covered by all the utilities they govern), a levy of .07 cents per KWH to cover the Ontario Hydro
Debt. In addition the utilities have to supply computer equipment and new programs to be able to meet the needs of Bill 135. To accommodate staff requirements must change, new legal and accounting costs.
Why is the Minister concerned about rising costs of electricity?
He is concerned because unlike Ontario Hydro who could greatly reduce
staff, most utilities were operating at bare bones for several years cost, and there were no frills to cut. Now with the above costs inflicted on the MEU or their successor Companies, revenues to pay the bills
as a result of Bill 135 are required.
Revenues must come in rate increases.
What will be the cost of power will be in the future?
No one knows. The Ottawa River Power Corporation will only be responsible
for less than 15% of the total bill. Changes in legislation are resulting in big dollar costs. There has been monstrous costs that been put in the system that were not there before the open market.
We have never been told what the costs really are.
What is Hydro One?
It is one of the successor companies of Ontario Hydro. The shareholder is the Government of Ontario.
Who is the vice president of Human Relations now of Ontario Power Generation?
It is John Murphy, the former head of the Power Workers Union.
Who or what is the Electrical Safety Authority?
It is the former Ontario Hydro Electrical Inspection Dept. expanded in
responsibilities. It is proposed that this department should be self-supporting.
Where do profits go from our utility in this New World?
They go to the municipalities in the form of dividends or to pay the debt that
was set up with the municipality. It was originally anticipated that this would go to help offset the down loading from the Province.
Why did you set up two companies?
Bill 35 stated that we must separate any operation that could be determined as competitive into a
separate company. For that reason we set p the Ottawa River Energy Solutions to hold new ventures, rentals, etc.
When will the market open?
It is now delayed a minimum of six months and a great cost.
How will we be served?
You will be served by calling your local office as before.
Should you sign up with a Retail Company now?
We suggest not at present. There are a lot of questions that are not answered and
please remember the cost of power they quote you may not be your total bill. You could end up paying a lot more for your power. Presently, we suggest you stay on "Standard Supply" until you know the rules
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Will certain customers get hit with higher increases than others?
Yes, as the rules are today.
How is the power going to get to me if I buy from a retailer?
The same way as it does today. There will be only one set of wires
in the City, the Ottawa River Power Corporation will have to segregate your retailer's loads, invoice you or the retailer for the power you used. It may be that you will pay the retailer's bill at our office
in some cases and we remit the funds to the retailer.
Board of Directors – How are they set up?
They are appointed by the shareholders, the municipalities who hold the shares.
Will the cost of power vary?
Yes it will. In theory it may go from zero to megabucks. For the first period, the government
wants to control the cost of power by limiting the increases. Depending on the time of day or month our price will go up or down. It could cost 4 cents at night and 50 cents at twelve noon.. this
will likely make in difficult for business and residential customers to budget power costs.
What about Load Management, I save hundreds of dollars a year?
At present it appears that if the present Government policy is
maintained, you'll lose this benefit.
This is not beneficial to me, this appears to me as a layman as going to cost more just to pay for the changes that have already been made let alone
the changes yet to come to handle and administer this new vision. What can I do about it?
We suggest you write to your Member of Parliament, the Premier, and Energy Minister Wilson.
Is this not what your utility manager got criticized for in January of 1999 by the minister in a letter to the Pembroke Observer?
Yes.
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