Quebec utility customers wait to save

By Montreal Gazette


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Hydro-Québec has become a victim of the success of its dual-energy savings program for residential customers.

With heating oil prices skyrocketing this year, demand for Hydro's dual-energy program has jumped about 600 per cent, said Marc-Brian Chamberland, spokesperson for the utility company.

But many Hydro customers are still waiting for the dual-counter meters needed to take advantage of cheaper electricity rates under the program.

"We really apologize for that," Chamberland said. "We are pretty confident they will get the service by the end of the year."

While Hydro normally handles 1,000 to 2,000 requests a year to convert to dual-energy billing, more than 6,000 customers have made the switch so far this year, Chamberland said.

About 1,300 of those clients have are still waiting for their meters to be installed.

The manufacturer who supplies Hydro with the special meters can only produce 200 a week, Chamberland noted. "It's impossible to get more."

Hydro employees who install the meters are also spread thin handling the rising demand for electric heating, he said.

About 70 per cent of Quebec homes now heat with electricity alone.

Chamberland said the utility is discussing ways to compensate customers who opted for dual-energy systems but could not take advantage of lower heating rates because of the equipment holdup.

"It's our firm intention to ensure that the customers are not penalized because they don't have the meters yet," he said.

The dual energy program allows customers to heat and light their homes at reduced electricity rates during relatively mild weather (minus 12C and above in southern Quebec).

When the thermometer plummets below minus 12C, more efficient heating systems, such as oil or gas, take over, but household electricity rates triple. (Temperatures dropped below minus 12 in Montreal on 46 occasions last winter, Environment Canada says.)

Dual-counter meters register the alternate energy consumption rates, and billing is adjusted accordingly.

About 120,000 Hydro customers now benefit from dual-energy rates.

Laval homeowner Dennis Kinko said he waited almost six weeks to have a meter installed after converting his oil-heating system to dual energy.

When he called Hydro to complain, employees told him some clients had been waiting since June to be hooked up to a meter, said Kinko, whose meter was finally installed.

"Hydro was caught off-guard by the huge demand to convert to dual energy," he said.

"Meanwhile, the cold season is here and I have been using my heat pump and paying the full (Hydro) rate - it's not fair."

The cost of converting from an oil forced-air furnace or oil radiator system to dual-energy is about $2,000 to $4,000, and $4,000 to $6,000, respectively, says Cherif Menassa, president of Thermolec Ltd., a Montreal firm that manufactures oil-electric dual-energy systems.

Prices could be steeper, depending on the contractor homeowners hire to install the equipment, he noted.

"Customers should ask for two or three quotes, and not press the contractor to do a rush job," Menassa said.

Dual-energy savings usually offset the cost of conversion within a couple of years, experts say.

Kinko said he expected to save hundreds of dollars this winter alone by converting to a dual-energy heating system.

"Instead of using a reservoir and a half of oil, I'll probably use one-third of the reservoir."

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It is AEMO's forecast of reduced reserves, higher outage risk, and a need for 1GW strategic backup capacity.

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Australia’s electricity operator has warned of threats to electricity supply including a shortfall in generation and reduced power reserves on the horizon.

The Australian Energy Market Operator (AEMO) has called for further investment in the country’s energy portfolio as retiring coal plants are replaced by intermittent renewables poised to eclipse coal, leaving the grid with less back-up capacity.

AEMO has said this increases the chances of supply interruption and load shedding.

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Key Points

A government plan to lift electricity rates 2.5% annually over three years via Bill 35, bypassing PUB hearings.

✅ 2.5% annual hikes for three years set in legislation

✅ Bypasses PUB rate hearings during pandemic recovery

✅ Targets Crown utility debt; multi-year review planned

 

The Manitoba government is planning to raise electricity rates, with Manitoba Hydro scaling back next year, by 2.5 per cent a year over the next three years.

Finance Minister Scott Fielding says the increases, to be presented in a bill before the legislature, are the lowest in a decade and will help keep rates among the lowest in Canada, even as SaskPower's 8% hike draws scrutiny in a neighbouring province.

Crown-owned Manitoba Hydro had asked for a 3.5 per cent increase this year, similar to BC Hydro's 3% rise, to help pay off billions of dollars in debt.

“The way we figured this out, we looked at the rate increases that were approved by PUB (Public Utilities Board) over the last ten years, (and) we went to 75 per cent of that,” Fielding said during a Thursday morning press conference.

“It’s a pandemic, we know that there’s a lot of people that are unemployed, that are struggling, we know that businesses need to recharge after the business (sic), so this will provide them an appropriate break.”

Electricity rates are normally set by the Public Utilities Board, a regulatory body that holds rate hearings and examines the Crown corporation’s finances.

The Progressive Conservative government has temporarily suspended the regulatory process and has set rates itself, while Ontario rate legislation to lower rates moved forward in its jurisdiction.

Manitoba Liberal leader Dougald Lamont was quick to condemn the move, noting parallels to Ontario price concerns before saying in a news release the PCs “are abusing their power and putting Hydro’s financial future at risk by fixing prices in the hope of buying some political popularity.”

“Hydro’s rates should be set by the PUB after public hearings, not figured out on the back of a napkin in the Premier’s office,” Lamont wrote.

Fielding noted the increase would appear as an amendment to Bill 35, which will appear in the legislature this fall, as BC Hydro plans multi-year increases proceed elsewhere.

“All members of the legislative assembly will vote and debate this rate increase on Bill 35,” Fielding said.

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In its report, the firm said the projects are unlikely to be canceled outright. Rather, they will be pushed into the second half of 2020 or 2021. The analysis assumes that virus-related disruptions subside by the end of the third quarter.

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Currently, restricted travel is the most likely cause of project delays, the report said. Developers expect delays in physical site visits for interconnection and commissioning, and workers have had difficulty reaching remote construction sites.

For earlier-stage projects, municipal offices that process permits are closed and in-person meetings between developers and landowners or local officials have slowed down.

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A sentence seemingly granting the board permission to create subsidiaries was included in the board's new terms of reference, which the NDP raised during question period Wednesday. 

The document also eliminated references asking Manitoba Hydro to keep electricity rates low, even as rate hike hearings proceed, and supply power in an environmentally-friendly fashion.

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"They're essentially taking the heart out of Manitoba Hydro," NDP leader Wab Kinew said.

Cheap, clean energy is the basis by which the Crown corporation was formed, even as scaled-back rate increases are planned for next year, he said. 

"That's the whole reason we created this utility in the first place."

Another addition to the board's guidelines include stating the corporation is responsible to the government minister, who must be "proactively informed" when significant issues arise. 

The provincial government, however, says the rewritten terms of reference was the directive of the Manitoba Hydro board and not itself.

CBC's requests to the government for an interview were directed to Manitoba Hydro.

In an interview, Manitoba Hydro spokesperson Scott Powell said the energy utility has undergone no legislative changes, and is still governed by the Manitoba Hydro Act. 

The terms of reference were altered to align the board's duties with the new act overseeing Crown corporations, Powell said.

"Whether you have one or two words different in the terms of reference, the essence of the company hasn't changed."

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On the cost to ratepayers, the updated directions asks the utility to deliver "safe, reliable energy services at a fair price," a standard clarified by a recent appeal court ruling on First Nations rates, but the board is not specifically instructed with keeping electricity rates low. 

Kinew contends the added sentence on subsidiaries permits Hydro to be broken off and sold for parts, although the terms of reference does not specify if any subsidiary would be wholly owned by Hydro or contracted to a private company.

Powell said Manitoba Hydro has been permitted to create subsidiaries since 1997, and nothing has changed since.

Kinew warned about Hydro's privatization last week when Jay Grewal was announced as Hydro's incoming CEO and president.

She was employed with B.C. Hydro when then-premier Gordon Campbell — hired by the Manitoba government to investigate costly overruns on two electricity megaprojects — sold off segments of the utility.

She then became managing director of Accenture, a global management consulting firm, which acquired several B.C. Hydro departments.

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Derek Mombourquette said he is in "constant contact" with the privately owned utility.

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When asked if the Liberal government would order the utility to lower electricity rates as households and businesses struggle with the financial fallout from the COVID-19 pandemic, Mombourquette said there was nothing he could do.

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Nova Scotia Power CEO Wayne O'Connor has also said the company is making additional donations to a fund available to help low-income individuals and families pay their energy bills.

In late March, Ontario cut electricity rates for residential consumers, farms and small businesses in response to a surge in people forced to work from home as a result of the pandemic, alongside bill support measures for ratepayers.

Premier Doug Ford said there would be a 45-day switch to off-peak rates, later moving to a recovery rate framework, which meant electricity consumers would be paying the lowest rate possible at any time of day.

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