Ontario Electricity Regulation Crisis Report Part 114: How Toronto Hydro Screws Small and Medium-sized Businesses

Notwithstanding its natural advantages due to economies of scale and service territory density, Toronto Hydro currently charges 28% more for distribution service than the average of the distribution rates charged by the province’s other large urban distributors. Toronto Hydro’s record on rates charged to small and medium-sized business is much worse.

Attached are surveys of the core distribution rates of each utility for residential customers as well as for small businesses with demand less than 50 kW and medium-sized businesses with demand of 1 MW. The methodology for determining the core distribution rates of each utility is consistent with the corrected version of the analysis presented in Part 113 of this series. Excluded from these surveys are charges included in distribution rates but recovered on behalf of entities other than Toronto Hydro, such as contributions to the “Smart Metering entity”. Also excluded are temporary charges such as rate riders for Global Adjustment deferral account clearance, stranded meter assets recovery, other deferral and variance account clearance, tax adjustments, foregone revenue, CGAAP/CWIP differential, Smart Grid funding adder, and the Ontario Clean Air Benefit. The rates for each utility are taken from the applicable rate order of the OEB.

What the surveys show is that small businesses with demand less than 50 kW served by Toronto Hydro pay core distribution rates 57% more than the arithmetic average of rates for identical customers served by the next nine largest urban power distributors in Ontario. Medium-sized businesses with demand of 1 MW served by Toronto Hydro pay rates 62% more than the average of identical customers served by Toronto Hydro’s peers.

Residential and General Service (GS) small business distribution (DX) rates:

urban DX rates – residential,
urban DX rates – GS-50kW,
urban DX rates – GS 1MW.

5 Comments

  1. I suspect that Toronto Hydro’s high distribution rates play a role in making Ontario, and particularly Toronto, the worst place for youth unemployment as this somewhat dated (2013) but still applicable report noted: http://www.cbc.ca/news/canada/kitchener-waterloo/ontario-s-youth-unemployment-among-worst-in-canada-1.1872206

    If the choice is; hire an employee or pay the Toronto Hydro bill it will always be the latter if you want your business to survive!

    Nice to know that we are ensuring that “Tony’s” big fat pension gets paid though!

  2. Using subsidies is one means of building a voter base to support renewable energy after the artificial demand is created for them by legislation.

    Small urban solar projects that attract many small investors produces a quick ready source of votes to support this.

    Once people make money off from these schemes then try to remove the subsidies from those getting the money from these schemes.

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