The Ontario Energy Board (OEB) has accepted an Assurance of Voluntary Compliance (AVC) from Kingston Hydro Corporation after a billing miscalculation resulted in some customers being overcharged.
The mistake got on the radar of the company after the OEB accepted an AVC from a distributor who overcharged customers due to incorrectly prorating fixed charges on monthly bills.
The OEB sent out a letter last April asking other providers to review their own billing system and ensure similar issues weren’t happening and in June 2022, Kingston Hydro Corporation discovered their prorating system was similarly miscalculated.
“While the distributor used the approved fixed monthly charges from its OEB-approved Rate Order, its billing system translated these monthly charges into a daily charge for application to customers’ bills,” the AVC explains.
“In the translation from monthly to daily charge, the daily charge was calculated on the basis of there being 30 days in every month (or 360 days in a year) but billed customers 365 days a year, leading to an overcharge of each customer.”
Utilities Kingston CEO David Fell said this mistake was immediately corrected when noticed.
The company only uses proration in two cases: when a person moves in or out of a location resulting in a partial month bill for utilities, or when a customer is being billed off cycle.
Fell said due to this, between 7,000 and 14,000 customers would have been impacted by incorrect billing over a four year span.
“It only affected about a third of our customers,” Fell said.
“Not everyone moves in or moves out on a partial month, and so for those third of the customers the bill credit would have been really small, less than fifty cents.”
Fell said working to track down these customers would have been a poor use of resources given the credit owed.
In light of the meagre amount customers would stand to claw back coupled with the fact that a number of these overcharges would have been against college or university students who may not even be in Kingston anymore, Kingston Hydro Corporation proposed to instead contribute the overcharged amount to the Low-income Energy Assistance Program (LEAP).
The OEB has accepted that resolution, and so a $21,787 lump sum payment will be made in the next 90 days.
Applications for accessing LEAP are handled by United Way Simcoe Muskoka, who also handles the programs for distributors like Enbridge and Hydro One.
As part of the AVC, Kingston Hydro Corporation will also pay a $2500 administrative penalty to the OEB.