Frequently Asked Questions Regarding High Bills

Why is my bill so much higher than the last one? I have not changed my life style. Is the meter wrong?
There are a number of possibilities and we will make every attempt to help identify the problem for you.

You may have added a new appliance while retaining the old one (i.e. a refrigerator).  Perhaps an additional appliance was brought into your home. An addition to the family would also increase consumption.

Secondly, the most likely cause of your high bill is the cost of the commodity or energy (KWH).  The cost of energy in May of 2002 was in the order of 2.3 cents. The costs are now up to the 8.0 cent level.  This is an increase of almost 3.5 times the original price. The price is much higher than the Government ever expected. Their forecast statements stated that the price of power would go down in the open market.

What can I do about it?  I cannot afford this. I will have to split my payments.  This is an essential service.
As a citizen, or business, you may register your concerns with the Government of Ontario and request a solution. Any correspondence can be addressed to:

Ministry of Energy, Science and Technology
Office of the Minister
Hearst Block
900 Bay Street
Toronto, ON
M7A 2E1
Attention: Honourable John Baird, Minister of Energy

What and why are all these extra charges? 
In the past, we have issued a stuffer with your bill to explain what each function on your bill related to.  We would be pleased to expand on these explanations.

Debt Retirement Charge
Although your local utility had no debt, Ontario Hydro had an enormous debt.  Ontario Hydro (now Hydro One) is the utility owned by the Province of Ontario and their debt was backed by the Province of Ontario.  Because this utility is owned by every customer and taxpayer in the Province of Ontario, the Government assessed a surcharge of .7 cents per kwh on every customer in Ontario, regardless of whether they were served by a municipality. This surcharge is an attempt by the Province to pay down the enormous debt.

Why am I paying GST on the debt?
This a federal charge and is considered a service. We are not able to explain why, other than it is a requirement that we pay GST.

To explain the next series of questions, everyone must recognize how the electricity gets to your home or business.
The distribution of electricity may be likened to that of water. We will begin by looking at some of the terms used in billing electricity and how they compare to one another.

Amps (current)
This is the amount of electricity that flows through a wire in a second. If you were to compare this to water, it would be the amount of water that flows through a pipe in a second.  If you have a 100 amp service, that is the capacity of the service or the maximum amount that service will facilitate.

Voltage
This is the pressure or force required to push the current through the wire.

Watts
This is the measurement of the unit of power.  It is the quantity of electricity going through the wire or, if you are talking about measuring water, the gallons per minute.

Kilowatts
This is equal to 1,000 watts.  Kilowatt-hours are 1,000 watts multiplied by the number of hours. A 100 watt bulb left on for ten hours is one KWH.

What are the steps in getting the electricity to my home or business?
Because of the number of steps, the government required the local distributing company (ORPC) to segregate the bill so that, you, the customer may identify where the costs are in receiving your power.

Generation
Electricity is generated by water, gas, coal, wind and nuclear.  The cost of generation is termed as "commodity".  This varies hour to hour, depending on what generation is on line at that hour.  Water and nuclear is normally the least expensive.  At peak times, Ontario is forced to import power to meet their requirements, which may increase the cost of the commodity.

Transmission Network Charge & Transmission Connection Charge
This is the cost to get the electricity from the generator to your local utility.  This requires the electricity to travel through a series of transmission lines (115 kv & 230 kv) and high voltage transformers.  The transmission lines, for the most part, are owned and operated by Hydro One (former Ontario Hydro). Hydro One is required to provide a profit as well as pay taxes and dividends to the shareholder. One of Hydro One's shareholders is the Province of Ontario.

Service Charge
This charge covers the cost of meters, administration services, billing, meter reading and the collection of accounts at the local utility.  In the case of ORPC, it covers the costs of our utility. This charge varies, depending on the type of customer. For example, there are customers who are in an 'over 50 KW load' category.  They require three-phase power, thus resulting in a greater expenditure to supply the service rather than a residential customer or small commercial business.

Distribution Volumetric Charge
This charge covers the cost of installation and maintaining of the wires, substations, transformers, poles and other equipment that is required to supply electric power to the customer.  The Service Charge and Distribution Volumetric Charge are the only costs that are attributed to the Ottawa River Power Corporation.

Wholesale Market Service
The process of purchasing and making certain there is sufficient power available for Ontario's customers is administered by a central control known as the Independent Market Operator (IMO).

The IMO is operated by the Government. It is independent of all retailers and distribution companies. It operates at cost. This cost is billed on the number of kwh that a customer uses in a month. That cost is set by the Ontario Energy Board.

Standard Service Supply (SSS) Administration Fee
There is a charge of 25 cents per month for customers who remain with the LDC for their supply of commodity or energy. This is intended to cover the cost of billing/collecting and service calls.

Commodity
There are two ways to purchase the commodity. 

• You may continue to purchase your electricity from your local distributor (i.e. ORPC). The cost of power that ORPC charges is based on the Hourly Ontario Electricity Price (HOEP) established by the Independent Market Operator. The price varies every hour and may be at any cost.
• You may purchase from a Retailer and, if that is the case, you will pay the contracted price.  You will not pay for both.

The commodity cost of electricity is passed through to ORPC with no profits or additions.  To see the price by the hour, check the IMO web site.

Loss Factor
As electricity passes through the wires and equipment, there is a line loss. To compensate for these losses, an additional charge is added to every kwh to retrieve these losses. This is a standard rate throughout the province and is set by the Ontario Energy Board.

In summary, the government is attempting to illustrate, to the customer, all of the costs involved in getting electricity to your home or business. Other than the commodity rate, all rates are subject to Ontario Energy Board approval.

Why do we have to pay line losses? Is this not the responsibility of ORPC?
The line losses were always in the cost of power, it is part of the cost of doing the business.  It was never separated out before.  You buy "x" kwh at the generator but only get or are able to put "y" kwh through the customer's meter.  Someone has to pick up the cost of getting the power to the customer and it is attributed to the customer on a kwh consumption basis.

When did all these changes take place and why?
The changes took place on May 1, 2002. There are two main reasons for these changes.

Ontario Hydro had created a huge debt that was greater than the Provincial debt. This debt was increasing on an hourly basis. The government saw a change in the world's electricity business. They felt the industry in Ontario should be separated, sold off and privatized.  The Government believes that competition will cause greater efficiencies and better management and this would then reduce the cost of power.

Will you start a letter of protest to send to the government regarding this?
The primary role of the Ottawa River Power Corporation is to distribute the power at an approved rate. As our success is attributable to customer satisfaction, we are concerned about our customers. Unfortunately, we are unable to start a petition as we are under licence.

My meter is spinning too fast, something must be wrong with my meter.  What would cause it to spin so fast?
The speed of the dial may be an indicator that you are using more or less energy at a time; however, different meters have different constants.  Some meters have metering transformers, so although the speed may be an indication, it is not necessarily the best judgment.  The dials, if checked over a period, will give you a better indication.  The dial readings or the gear ratios are calibrated to give the correct reading.  Meters, because they are mechanical, have a tendency to slow down rather than speed up.

How much electricity does a water heater use?
Most water heaters use 3 KWH per hour during their operation. Usage depends on the customer, number of showers/baths, washing machines, dishwashers, leaking taps, etc. Electric water heaters range from 300 to 600 kwh usage per month.

I live alone, I have a gas water heater, a gas furnace and I am not home during the day.  Why should my bill be so high?
Compare your consumption with your bill one year ago.  If it is the same or similar, then it is the new rates that have created a higher bill. There are appliances in the home that continue to operate, even if you are not home (i.e. refrigerators, deep freezers, humidifiers, dehumidifiers, furnaces, air conditioners, etc). 

I just installed central air on my gas furnace.  Why would my bill be so high? When the unit was installed, I was told it would cost $20.00 to $40.00 a month more.
Please note that your residential bills are based on two months' consumption. An increase of $40.00 to $80.00 on your bill would be correct. This past summer was quite warm for a long period of time and this may contribute to a higher cost. In addition, during the period July through September 2002, the commodity costs were abnormally high, two to three times higher than May 2002.

I was on holidays and not at home. Why should my bill be so high?
Check the reading date on your bill to determine the actual billing period.  The higher bill is likely attributed to the high cost of the commodity.

Could I be paying for someone else's hydro?  Could there be someone else hooked up to my meter or another apartment?
It is not very likely in a new apartment building; however, we have had cases in older apartments or converted homes where there was cross wiring of plugs, car plug outlets or the hook up of a water heater.  If you are concerned, ask your landlord to check this out for you.

I only turn my humidifier on for a short period of time. Why is my bill so high?
If the consumption is in the expected range, then the rates are the culprit.

I only leave one baseboard heater on to conserve hydro.  Why should my bill be so high?
I would assume this is a winter question.  To heat a room or home, the amount of heat required is governed by the volume or size of that room, plus the heat loss through an outside envelope. A 1000 watt heater will take three times longer to heat a room than a 3000 watt heater but in theory the 3000 watt heater should operate only one third of the length of time, therefore costing the same. Whether a customer heats with gas, oil or electricity, it is the heat loss that adds to the cost of heating. We also have to keep in mind the cost of the commodity and how it has changed.

My neighbour's house is bigger than mine.  They have more appliances, there are more people in the house, yet my bill is higher than theirs!!  Why?
Compare usage and appliances.  Are you heating the house with the same fuel? What are the condition of your windows, insulation etc.? Do you both use your appliances the same length of time?  Hydro consumption is related more to lifestyle than living space.

Would I be better off with a retailer? How much would I save?
The only difference between your local distribution company and a retailer is the cost of commodity. All other charges will still apply to you. Since Market Opening on May 1, 2002 and October 4, 2002, the average cost of power has been 5.23 cents per KWH.  This price should be compared to the price that your retailer is offering you.

What is the 'rebate' that we are hearing about?
Due to the fact that Ontario Power Generation (OPG) has a monopoly of the generation in the Province, the Government has legislated that they can not charge more than 3.8 cents per KWH for more than 70% of their power.  Anything in excess of that amount must be refunded to you, the customer.  It was estimated that the cap would likely be 4.3 cents per KWH.  Presently, OPG wants to raise this cap but the Government has committed OPG to this cap.  How or when this will be rebated has not yet been determined by the regulators.  In the interim, it is a cash flow problem for customers.

I have a big business. How can I reduce these power costs in order to avoid bankruptcy?
You may have an interval meter installed and then you are billed only for the cost of power at the time of usage.  In other words, if you can shift loads to a night shift, you may only pay two cents per KWH or what ever the cost of power is at the off peak period.  The most expensive power is during the day time. Delivery of the interval meters could take up to three to four months.