Canoe

Monday, May 21, 2001

Ontario consumers in dark on power rebate By LOUISE ELLIOTT-- The Canadian Press

TORONTO (CP) -- Ontario consumers may be unwittingly signing away a valuable rebate on their electricity prices to private utility companies, says the head of an energy watchdog group.

The Market Power Mitigation rebate was created in 1999 to offset a potential rise in power prices once Ontario's electricity market is opened to competition, sometime next spring.

Sales representatives from private electricity marketing companies have been knocking on Ontario doors for months, asking homeowners to sign on for a fixed electricity rate when the market opens.

Tom Adams, director of Energy Probe, says consumers may not notice a fine-print clause which, in many of the agreements, hands the potential rebate over to the electricity firm.

While there may be nothing wrong with such a clause, consumers by and large don't even know it -- or the rebate -- exists, Adams says.

"If the price is right, it's a balanced transaction, but the problem is nobody has any information, and the public agencies aren't doing their job of explaining it to us."

The rebate is supposed to kick in for consumers when the yearly average cost of electricity for a household rises above a benchmark price of 3.8 cents per kilowatt hour.

The rebate is designed to shield consumers from massive price spikes such as those seen in Alberta and California, where deregulated markets have recently seen a tripling of prices and rolling blackouts.

Intended to reduce the market dominance of Ontario Power Generation, which at the time of deregulation will still control 65 per cent of the market, the rebate will be paid out by the generator for the first four years after deregulation.

"If they control 65 per cent of the market (at the time of deregulation), which is their current position, you'll get a rebate on about 50 per cent of your cost above 3.8," Adams said.

For example, a typical residential customer using 10,000 kilowatt hours a year at an average electricity price of 5.65 cents a kilowatt hour would get a rebate of about $139.

But that information is hard to come by because bodies like the Ontario Energy Board and the Ministry of Energy aren't doing their jobs, Adams says.

"The public agencies that are responsible for providing customer education and explaining what this rebate is about don't have any literature anywhere on the public record that explains the rebate," he said.

The Web site of Ontario Power Generation contains information about the rebate for the province's wholesale electricity consumers.

But most retail customers still have no clue the rebate even exists, said a spokesman for the Independent Electricity Market Operator.

"It's not well enough known (the rebate exists)," said Kevin Dove, a spokesman for the body that will be responsible for calculating the rebate.

"We (try to) make it abundantly clear to the wholesale customers in the province."

By its own admission, the Ontario Energy Board has so far failed to produce any printed information geared to residential customers.

"The problem is there's a lot of information we won't have until closer to market opening," says Christine Staddon, a spokeswoman for the board.

"That's our dilemma."

Staddon said a fact sheet on the rebate will be made available "imminently" for consumers.

But many customers have signed away their rebates already and they're still in the dark, Adams said.

"Customers are out there making decisions that they can't be informed of because (the energy board) is not doing (its) job," he said.

The rebate may be crucial in helping to save the province from the supply crunch that continues to cripple California, Adams said.

"This is actually one fundamental strength that Ontario's electricity restructuring has that California doesn't have."

Michael Krizanc, a spokesman for Energy Minister Jim Wilson, said the government provided information on the rebate in a mailed notice to electricity customers last year.

But he acknowledged there is still an information gap.

"I think there's a lot more that people have to be made aware of about what we're doing about electricity restructuring in Ontario," he said.

"The government recognizes it has a responsibility to keep people informed."

Krizanc said a new information campaign will commence in the lead-up to next year's deregulation date in May -- the third date set by the government so far.

-- Rachel Gibson (rgibson@hotmail.com), May 21, 2001