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Hydro One accused of deceit in ombudsman’s report on billing ‘crisis’

The investigation into the utility’s billing failures was the largest in the Ombudsman’s office history featuring more than 10,700 complaints.
May 25, 2015
By Richard J. Brennan

Thousands of Hydro One customers were trapped in a billing nightmare because the utility chose instead to lie about how serious the problem was, ombudsman Andre Marin says.

“What really concerns me is how they obstructed and lied to and evaded the minister of energy’s office when they asked questions, the (Hydro One) board of directors and the Ontario Energy Board,” Marin told reporters Monday.

In his latest report into Ontario’s largest utility, entitled “In the Dark,” Marin said Hydro One’s introduction of a new computer billing service was an unmitigated failure that left many of its 1.3 million customers entangled in a bureaucratic maelstrom that continued even after the ombudsman’s office highlighted the problems earlier this year.

Marin told reporters that as the billing “crisis” deepened, Hydro One “deliberately kept the situation under wraps ... even deceiving the electricity regulator, my office and other stakeholders about the extent and nature of the company’s billing and customer service disaster.”

The outspoken ombudsman noted this was borne out by several emails his office received from Hydro One during his office’s investigation.

Hydro One president and CEO Carm Marcello said the $180-million computer system, after its $88-million retrofit, is fixed now and denied misleading anyone.

“Not at all,” Marcello said.

“We provided regular updates to our board of directors, our management team and we provided all the update to all the agencies, including the ministries,” he said, explaining that the complaints coming in were moving targets.

Energy Minister Bob Chiarelli called Marin’s comments “very serious” and added that he has instructed the new chair of the utility’s board of director David Denison to thoroughly examine the ombudsman’s accusations.

Marin used his damning report to bolster his argument that the Wynne government should preserve independent oversight of Hydro One once it is partially privatized. The Liberal government wants to sell off 60 per cent.

“My report clearly documents Hydro One’s failure to communicate openly, honestly and proactively with its customers, its regulator, ministry (of energy) officials and my office,” he said.
NDP Leader Andrea Horwath said Hydro One is a private company the ombudsman’s office won’t be able to touch it.

“Once this is a private company, some internal ombudsperson is certainly not going to be acting in the best interest of the public. They are going to be ... covering up for the company,” said Horwath, whose party is vehemently opposed to the partial sale of Hydro One.

The investigation into the utility’s billing failures was the largest in the ombudsman’s office history. It featured more than 10,700 complaints that revealed a litany of “egregious problems” with billing and customers service arising from Hydro One’s “disastrous” installation of a new customer information system in May 2013, which Marin estimated affected well over 100,000 customers.

Marin announced his initial investigation in February 2014 and issued his interim report in March 2015, in which he accused the utility of “extortion” for sending out letters in winter threatening to cut off electricity to customers in arrears - even though it was against company policy.

Marin remarked on how Hydro One customers complained to him of having huge sums of money pulled from their banks without warning or were hit with “outrageous bills” and were treated “abominably.” In one case, the utility took $10,000 from the bank account of a Timmins man - “it took months before his bill was reduced (to) just $800.”

Dianne Noftle, of Whitby, well remembers her unpleasant dealings with Hydro One after getting an unexpected bill for their Bancroft area cottage for more than $900 - over their regular monthly bill.

“And now I hear they are sorry,” Noftle said, referring to a mea culpa from Marcello during Monday’s press conference.

Noftle said when she tried talking to Hydro One about the bill “they were totally unapproachable. There was no room for negotiation. They’re in a league of their own.”

“It was just an amount they figured - over and above what we pay them every month - that we owed them. They said because you have equal billing you used more (electricity) than that,” she said, noting that the average bill runs about $168 a month at the cottage.

“We did all the things we thought we should do to conserve energy,” said Noftle, a nurse, referring to her husband, Robert.

In the end, despite asking to pay it off over a few months, Noftle was told to pay the $950 over two months or else the power would be cut.

Marin’s report included 66 recommendations for Hydro One, and job one for the utility, he said, is to consider the impact on customers throughout all project planning and keep track of how users are affected.

“Hydro One lost sight of its public interest purpose and failed to adequately consider the impact of its customers,” Marin told the Queen’s Park press conference.

“Its overconfidence in its technical superiority fostered complacency. It forgot to consider the consequences of its customers.”

Hydro One horror stories

Ombudsman Andre Marin said within days of Hydro One’s new billing system being introduced in May 2013 things started going haywire:

An 84-year-old King Township woman received three bills for $9,000 in the same month, covering the same time period in the fall of 2013. She had previously been billed an average of $200 a month.

A retailer had $163,000 automatically withdrawn from their bank even though the bill had been paid.

Canadian Forces Base Petawawa was wrongly billed more than $50 million in June 2014 . It was not clear what the base was supposed to be charged. Its previous bill was $4,428.

An Inglewood man received a bill for $18,000 after selling his property in April 2013. He was expecting his final bill to be under $100.

A Bolton man received no bills from June to September 2013. The next month, he starting receiving confusing bills, some based on estimates and some based on actual meter readings.

After he complained, Hydro One sent him a new set of bills, with a balance owing of $73,385.