Hydro One billing service ‘outrageously’ bad: Ombud
Toronto - A special Ontario ombudsman’s investigation into Hydro One uncovered stunning billing errors, “outrageously” bad customer service and an organization that misled even the electricity regulator on the extent of its problems.
Andre Marin’s probe of Hydro One, which culminated in the release Monday of his final report, In The Dark, was prompted by a deluge of public complaints that followed the implementation of a new billing and customer service system at the publicly-owned utility.
Marin estimates that more than 100,000 Hydro One customers were ultimately impacted through overcharging, missing or multiple bills and an ineffective complaint system.
Getting to the root of the problem with Hydro One was akin to trying to pin a kangaroo to a trampoline, Marin said.
“To fix the customer service problems cost $88.3 million — almost half the price of the initial system,” he said. “It was a fiasco, it was a mess … that’s eight times my budget to oversee all of government.”
The ombudsman refused to accept that the “mind-boggling maladministration” could be put down to just software programming or defective data.
“Rather, its fatal flaw is a technocratic and inward-facing organizational culture that is completely out of step with public sector values,” his report concluded.
Marin claimed his office — as well as Hydro One’s board of directors, the Minister of Energy Bob Chiarelli and the Ontario Energy Board (OEB) — were misled by Hydro One officials about the extent of the problem.
He said it was unfortunate that the Ontario government, in its plan to sell off a majority stake of Hydro One to the private sector, also intends to remove his office’s oversight of the utility while leaving the OEB as the go-to independent organization for public complaints.
“We’re the ones that blew the whistle on this,” Marin said. “I’m the one who discovered that they were all misled.”
His office received 10,565 public complaints about Hydro One, more than in any other single investigation in its 40-year history.
“In one case, Hydro One took $10,000 from the bank account of a senior from Timmins, leaving him on the hook for overdraft charges — it took months before his bill was reduced to just $800,” Marin said. “In another, it charged an Ottawa man $11,000 after his metre was changed and five years of electricity he had already paid for was added to his bill.
“It took him more than a year, 40 calls to the call centre, five complaints to managers and finally our office to get the mess sorted out.”
Hydro One CEO Carmine Marcello said the organization made mistakes but has now begun or completed work on 64 of 65 recommendations made by Marin to prevent future problems.
“Last year, I wrote to my 1.3 million customers and I told them I was sorry … including the 95% who had never experienced the problem,” Marcello said. “We let them down, we didn’t treat them well, and we’re sorry we put them through a difficult experience. It’s unfortunate that they had no recourse but to go to the ombudsman.”
Hydro One has been fixing the billing system and addressing technical issues, but failed to appreciate the impact on customers, he said.
Marcello said his organization did not provide misleading information to oversight organizations, but several key people were asked to leave Hydro One.
Marin said he does not believe that all problems have been fixed, and he continues to get complaints from customers.
Chiarelli said he has sent a letter to the chair of Hydro One asking for a thorough analysis of the ombudsman’s findings and any other issues around customer service.
“There is a significant disappointment — it was a serious issue,” Chiarelli said. “Hydro One has taken a lot of remedial action.”
HYDRO ONE’S SHOCKING BILLS:
- A ski club received a $37,000 bill in error, complained and was sent a $36.7-million bill.
- Sudbury man sent $19,152 bill in April 2014, after four-month delay to update system after meter replacement. After actual readings viewed, his bill was $74.
- King Township woman, 84, whose average monthly bill was $200, stopped getting bills, then three bills covering the same time period arrived in one month, demanding $9,000 each. Her actual bill? $640.
- An Inglewood man expected a final bill for a sold property to be under $100. He received a letter from a collections company on behalf of Hydro One saying he owed $18,000. He actually owed $56.35.
- A Matheson man, after getting no Hydro One bills in the summer of 2013, was hit by six estimated bills and then the utility withdrew $1,959 from his bank account unexpectedly. Actual bill was $144.
OMBUDSMAN TIPS TO HYDRO ONE TO STOP MESSING UP:
- Put the customer first in all project planning phases.
- Ensure number of customers impacted by systems issues tracked.
- Adopt proactive, transparent, open and accountable approach.
- Train staff before introducing initiatives that impact customers.
- Provide timely and accurate scripts for call centre staff.
- Tip for the Ontario government — Consider keeping oversight by Ontario ombudsman of Hydro One, even if restructured.
Ontario’s hydro situation getting worse: Expert
BY SHAWN JEFFORDS, TORONTO SUN
FIRST POSTED: SATURDAY, APRIL 25, 2015 07:00 PM EDT
TORONTO - Energy analyst Tom Adams says Ontario’s messy hydro situation isn’t going to get better any time soon.
And last Monday’s Ontario Energy Board announcement that peak rates will increase to 16.1 cents/kWh from 14 cents/kWh is the result of bad decision making for years, he said.
But the news gets worse, we haven’t reached the peak when it comes to price increases, he said.
Adams expertise has been developed over the years working for Ontario Independent Electricity Market Operator Board of Directors and the Ontario Centre for Excellence for Energy Board of Management. He has also given expert testimony before legislative committees and regulatory tribunals delving into the energy sector across Canada.
Here are Adams thoughts on where we are in Ontario and how we got there:
On what’s driving these increases:
“At very big picture level, if you look at increases since 2008, the big factors are; coal shut down, wind and solar and biomass, conservation, the cost of new gas plants, renegotiation of existing contracts for hydro-electric and old gas plants, export loses, pension costs and rising costs at OPG (Ontario Power Generation).”
On the serious need to control prices and the challenge before the govern:
“That’s an understatement. What we have here is a tremendous amount of cost momentum. There are a lot of locked-in costs that have not yet shown up on your bill but are coming.”
On whether the government is doing enough to bring these costs under control:
“This file is on fire. This thing is way out of control. Electricity prices are skyrocketing. The government is making decisions every day that is making the situation worse, not better.”
On how can individuals avoid paying more and conservation:
“One of the prime drivers that is causing rates to rise is falling demand, lower sales of electricity. Approximately $20 billion has to be collected this year, $21 (billion) next year, $22 (billion) the year after. But we have declining units of sales. So, the way the math works, conservation is driving up your rates.”
On why hydro billing and prices are so complicated:
“What we have here is a legacy of a lot of politicians meddling in a complex industrial sector … Ontario politicians just can’t shut up about electricity. They have to talk about it four times a week in Question Period. The electricity file gets all of the calm, careful, thoughtful planning that Question Period can provide.”
Hydro must improve: ombud
Gary Lowe holds his Hydro One bills outside his home in Bayside east of Trenton, Ont. Wednesday, January 21, 2015. Though Hydro One and an inspector with the office of Ontario’s ombudsman say his nearly two-year customer-service battle has been resolved, Lowe said he may yet ask Measurement Canada to test his meter’s accuracy.
Ontario ombudsman André Marin and his staff continue to investigate Hydro One – and to encourage residents to report Hydro-related problems.
“It’s the largest investigation we’ve ever done, the most complaints we’ve ever received,” said Linda Williamson, Marin’s communications director.
By mid-March, she said, staff had received more than 9,600 complaints compared to about 647 prior to Marin’s announcement he was investigating.
“This huge spike in complaints did happen after the installation of smart meters and a new billing system,” she said.
Local resident Gary Lowe is far from alone in his beef about Hydro One’s customer service or lack thereof.
“We are seeing people calling and complaining about the kind of communication and information they’re getting from customer service agents at Hydro One, and not being able to resolve it,” Williamson said.
“Hydro needs to remember that it’s a public servant and that it has obligations to the public as a public servant.
“There’s a large volume of complaints and there are consistent themes.”
Improper billing practices and unsympathetic or disbelieving customer service workers are among those themes.
“People received bills even after a property had burned down,” Williamson said.
In another case described on the ombudsman’s website, a pair of seniors living on disability pensions complained to Hydro One about three missing bills.
“This is what happens when your house gets repossessed,” the website reports in describing the attitude of one customer service manager.
“The customers did their own research and determined that Hydro One was confusing their property with another home – with the same street address but in a different city,” the online report notes.
“Ombudsman staff persuaded Hydro One to speak with the couple and acknowledged the error by crediting part of their bill.”
Williamson said the office has logged at least 67 “extreme” cases – such as a customer receiving a single bill for $10,000 – but the ombud’s staff have resolved more than 4,000 complaints.
“The ombudsman is an office of last resort,” Williamson said.
Customers with concerns should first call Hydro One directly at 1-888-664-9376.
The ombudsman’s office is open weekdays from 9 a.m. to 4:30 p.m. at 1-800-263-1830, Monday-Friday, 9 a.m. to 4:30 p.m.
Marin is to release a report on his investigation during the first half of this year.
Gary Lowe holds his Hydro One bills outside his home in Bayside east of Trenton, Ont. Wednesday, January 21, 2015. His billing concerns with the electrical utility took nearly two years to resolve and required the intervention of staff of the Ontario ombudsman’s office.
BAYSIDE - All Gary Lowe wanted was to pay his electricity bill.
Instead, he fell into a nearly two-year customer-service nightmare that ended only after the involvement of the office of Ontario’s ombudsman.
“It blows my mind,” said Lowe, who lives in a single-storey home he estimates to be no larger than 600 sq. ft. He’s also on a fixed income.
In 2014, he complained to Hydro One about problems with his bill, including a missing bill and what appeared to be abnormally high fees.
“I pay every bill exactly as they come in, unless they tell me it’s different,” he said.
He got a shock when he called Hydro One’s customer service hotline.
“We sent it to your Owen Sound account,” the customer service worker said of the missing bill.
“I said, ‘When did I move to Owen Sound?!’” said Lowe. “I’ve never been there in my friggin’ life.”
It would take months before Lowe would learn the reason: as Hydro One and an investigator for the ombudsman’s office would later find, Hydro had mistakenly merged his account with that of another Gary Lowe in Owen Sound.
Adding further confusion to the matter was a sudden spike in the amount on the Bayside resident’s bill.
Hydro One billed him for $169 in November 2013, then $250 in December. But the January 2014 bill was for $485.
Lowe said his heaters are never set to temperatures hotter than 20C. The rental home’s basement is insulated and he insulated the roof himself.
He was convinced he was paying for two accounts: his own and that of his Owen Sound doppleganger.
He was livid when Hydro One continued to refer to his reputed second home and suggested he upgrade his appliances to reduce his electricity costs.
The situation worsened when Hydro One assigned new account numbers to customers and Lowe wound up paying into one account and being billed on another.
He made call after call in an attempt to resolve it, but got nowhere. The people charged with resolving customer complaints denied there was a problem, said Lowe.
He then filed a complaint with the ombudsman’s office in July, pursuing it further in October.
“Once this was brought to our attention we investigated the issue,” said Hydro One spokeswoman Nancy Shaddick, adding that investigation began last summer.
She acknowledged Hydro One’s error in merging the two Lowes’ accounts.
“Hydro One made a mistake … which is why we provided the service credits,” she said. Lowe received $481.40 “due to the inconvenience,” Shaddick said. The ombudsman’s investigator told Lowe the credit is equal to a 20-month refund for the flat-rate portion of service charges for a medium-density home.
She said the bills of both Gary Lowes now bear their middle names to prevent further confusion and customer service workers have received further training.
“The human error with the account did not affect any billing issues,” Shaddick said. “The bill he was receiving was for his meter on his property.
“Electric heating can account for up to 60 per cent of a home’s energy use in the winter,” Shaddick said.
“One five-foot baseboard heater can cost up to $150 a month, depending on the temperature outside and the temperature you have it set at.”
Both Hydro One and the ombudsman’s office now consider the matter to be closed, said the ombudsman’s communications director, Linda Williamson.
“We went to Hydro One and had them spell it out and we went over it all, too,” Williamson said.
“They did make the initial error” involving the other address, she said, but Hydro One fixed that problem in October 2014.
“There’s no evidence he was billed for Owen Sound,” Williamson said, though the ombudsman’s investigation has found other customers who’ve been billed incorrectly for two properties.
Lowe agreed the address and account number issues had been solved but said he remains skeptical about his high bill.
He said he may take the suggestion of the ombudsman’s office and request Measurement Canada examine his hydro meter.
In the meantime, he said, he recommends other customers set their heaters to lower temperatures.
Lowe also remains frustrated by the effort required to resolve other issues.
“They have no customer service,” he said of Hydro One. “I couldn’t get an answer no matter what I did and I don’t think it’s going to get any better.
“If the ombudsman wasn’t involved, it would never have been straightened out. That’s a fact,” he said.
“It’s a shame that you’ve got to get somebody from the government to try to intervene.”
Lowe said he’s still concerned about his ability to pay for electricity.
“If Ontario doesn’t do something about Hydro, there’s not going to be a factory left here, because a lot of people just can’t afford the hydro.”
Posted: | Last updated:
Category: Ontario Tags: Auditor, Bonnie Lysyk, electricity, ontario, smart meters, spending
Opposition reaction to the Auditor General’s scathing report was swift.
Opposition critics were very vocal Tuesday following the report’s release, saying that the overlying issue is a lack of transparency by the Liberal government.
They say it failed to take previous reports seriously, especially when it came to a warning about green energy and how this would impact the smart meter program. back in 2011, the Auditor General said global adjustment would increase electricity costs. Tuesday, the report confirmed that consumers are paying billions of dollars more for electricity because of the flawed program.
PC finance critic Vic Fedeli: “This government spent $50 billion more on buying electricity than they sold it for. That’s the bottom line. That’s why your hydro rates have tripled. That’s exactly what the auditor general told us in 2011. Why? Because they did no business plan for smart meters, they did no business plan for green energy and there’s no transparency.”
NDP Leader Andrea Horwath: “The Liberals also spent $2 billion on smart meters, double what they initially claimed. It hasn’t reduced consumption. And it hasn’t kept peoples bills down. And yet the minister is still saying that this morning, that it has achieved its goals, when we know it hasn’t. And in fact, he just said it again in his press conference. In my books, that’s not very smart.”
The Auditor General was critical of how the government switched to time-of-use electricity pricing. She says it hasn’t led to the government’s electricity conservation goals being met, though the Liberals say her assessment is premature.
Smart meters failing due to political decisions, auditor general finds (with video)
DAVID REEVELY Published on: December 10, 2014 Last Updated: December 10, 2014 8:28 AM EDT
Ontario’s $2-billion smart meter program missed goals: Auditor
Smart electricity meters have cost double what they were supposed to and haven’t saved Ontarians money by changing the times we use power, a major study by the provincial auditor general has found.
However, Energy Minister Bob Chiarelli responded harshly to the report, saying the auditor general and her staff don’t understand the province’s electricity system.
According to Auditor General Bonnie Lysyk, the big problem with the $2-billion project (aside from the fact it was supposed to cost $1 billion) is that politicians haven’t insisted on charging much higher prices to people who use a lot of electricity at times of really high demand. That means we’ve spent all that money for smart meters but aren’t getting the benefits that tying prices to demand is supposed to bring.
The meters were “rolled out with aggressive targets and tight timelines, without sufficient planning and monitoring by the Ministry (of Energy),” Lysyk reported Tuesday.
The ministry did no cost-benefit analysis before requiring Ontarians to use them, and underestimated the price of putting them in. A lot of the extra costs went into Hydro One, which supplies electricity to most of rural Ontario. It turned out that putting in the infrastructure needed to pull in the more complicated data its 1.2 million smart meters produce cost a lot more than the government expected.
Worse, the devices haven’t done what they were supposed to. The point was to reduce Ontarians’ use of electricity at peak times, when power costs the most to generate. But instead of cutting Ontario’s peak power consumption by 2,700 megawatts by 2010, Lysyk found our use of electricity increased by 100 megawatts. So it’s still around 25,000 megawatts at peak times.
The trouble isn’t with the meters themselves or the idea of “time-of-use pricing,” but that the government hasn’t had the nerve to use them the way they were intended to be used: by charging a big premium for using electricity when demand is high.
The finding won’t please critics of smart meters, who’ve argued that charging people more for electricity is just a cash grab.
When the system kicked in back in 2006, Lysyk reported, it cost three times as much to use electricity at peak times (such as hot summer afternoons when businesses are open and air conditioners are running) compared with low-use times (such as the middle of the night). Government policy steadily reduced the difference, until now peak-time electricity costs less than double the night-time low price.
And the definition of “peak time” doesn’t match reality, Lysyk found. In 2010, the government started charging lower prices at 7 p.m. on weeknights instead of 9 p.m., even though the plain evidence is that demand for power is high then as people run appliances at home while many businesses are still using electricity, too.
Lysyk’s job isn’t to pin blame and she doesn’t, but the directives come from the premier, the cabinet and the energy minister. That’s been Chiarelli, the MPP for Ottawa West-Nepean, since February 2013.
They didn’t even save utilities money. Lysyk’s team surveyed the power utilities such as Hydro Ottawa and learned that 95 per cent of them say smart meters cost them more to deal with than old dumb ones.
To the extent the smart meters have worked, the government has thrown the benefits away, Lysyk found.
“In the decade since the Ontario government announced Smart Metering, peak demand has remained essentially unchanged, but the Ministry has approved significant increases in new power generation, such as renewable energy, creating power surpluses in Ontario,” Lysyk wrote. So now we’re generating excess electricity that we often sell at a loss.
Chiarelli said the auditor made fundamental mistakes. She used estimates of some big costs instead of real final numbers, which meant she overstated the price of the meters by as much as $500 million, he said.
“Why are my numbers more credible than hers?” Chiarelli asked in a news conference after the audit report was released. “First of all, the electricity system is very complex, it is very difficult to understand. I can tell you that some of the (energy ministry’s) senior managers, in discussing some of these issues with some of the representatives of the office — from the auditor general’s office — had the feeling that they didn’t understand some of the elements of it.”
Even if overall energy use has gone up, he said, as many as 1.5 million households have shifted the times they use power and that’s saved customers $12 a year — $53 million provincewide — on raw electricity prices. Beyond that, Chiarelli said, smart meters are an investment, a new technology that will allow more sophisticated changes to how and how much Ontarians pay for power in the years to come.
Nevertheless, the ministry promised not to take on any more $2-billion projects without thinking them through. “In line with best practice, the Ministry will ensure that the proper analysis is completed ahead of implementing major initiatives,” it said in its formal written reply, included in the report.