Ontario Electricity Regulation Crisis Report Part 62: Beware of the Energy Company at the Door in Thorncliffe Park

Door-to-door energy marketers once bombarded Ontario households with deals. Except for the gas contracts of the early 1990s, only a tiny fraction of people who signed those contracts came out ahead. Most got locked into paying far more than neighbours who didn’t sign. Thousands of consumers were so incensed that they complained to the government.

The government eventually introduced regulations that actually helped consumers. Today, the Ontario Energy Board’s consumer education program about door-to-door marketers is smart, accessible, and helpful.

While the bad old days of door-to-door energy commodity contract scams are just about over, there is a new door-to-door energy scam out there.

For the last couple of weeks Toronto Hydro, sometimes through its insurance agent Cunningham & Lindsey, has been flogging a new deal in Thorncliffe Park.

Taking a page from the worst excesses of the gas marketers in the late 1990s, Toronto Hydro just started offering $50 to the residents of Thorncliffe Park in return for a signature.

Back in the 90’s, the fine print behind the $50 usually locked consumers into a 5-year commitment to buy their gas from the marketer at an inflated price.

This time, the fine print behind the $50 purchases silence.

During the period of March 8-10, a blackout occurred in Thorncliffe Park, one of Canada’s most densely packed high-rise neighbourhoods. 26 large apartment towers were blacked out, three of them for over 33 hours. Some of the blacked out towers are over 20 stories tall. In the order of 15,000 people, many immigrants and low-income families, live in the blacked out zone. The weather was cold and wet. Thorncliffe Park has recently been plagued with blackouts, but the March 8-10 event is so far the worst.

As previously reported, the equipment whose failure directly triggered the blackout was relatively young in service age, a simple-to-fix leak with that specific equipment was known to Toronto Hydro in advance, and Toronto Hydro was aware of the potential consequences but deliberately allowed that specific equipment with known defects to continue leaking until the blackout occurred.

Also as previously reported, the Thorncliffe Park event is part of a pattern. Toronto Hydro has previously used outages and go-slow recovery as a regulatory strategy for jacking up power rates.

Consumers have been sent two letters from Toronto Hydro and its insurance agent, the first dated March 20th (correction in Part 64) and the second April 4th. Copies of these will be posted on this site late tonight (delayed until April 12). On April 9th, I requested a copy of the April 4th letter from Toronto Hydro but so far have received no official response.

The April 4th letter claims that Toronto Hydro has completed its investigation of the event, provides a long and confusing dissertation on clauses of the OEB’s Distribution System Code, denies any liability for the event, and includes the following statement:

“It is understood and agreed that the facts and term of this settlement will be held in confidence.”

This statement takes a page from the gag orders flogged by the wind power scammers trolling rural Ontario.

Although it takes inspiration from previous gas and wind scammers, in an Ontario utility context the April 4th letter constitutes another unprecedented anti-consumer innovation from Tony’s Hydro, Tony’s Hydro.

Given the rotating door exchanging executive leadership between the Ontario Energy Board and the utilities in a way that institutionalizes conflicted interests, consumers looking to the regulator in their time of need may find that route disappointing.

Lawyers with an interest in class action litigation are welcome to post comments here, as are any other folks with serious comments, concerns, or corrections.

In the mean time, affected residents and businesses of Thorncliffe Park might carefully document their damages. These might include lost wages, lost business, lost food, damaged electronics and appliances, emergency lodging costs, and emergency childcare. Residents with special needs, like mobility limitations, might make notes documenting the impact of the March 8-10 blackout.

Post Script (April 12 8 am): A couple of typos and ambiguous pronoun corrections were made to the original post.

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