Ontario’s auditor general is calling for a closer look at the unregulated fees that electricity customers in multifamily buildings pay to unit sub-meter providers (USMPs). Her recently released 2022 annual report notes there are now more than 390,000 households in the province that lack some of the consumer protection provided to residential customers who have direct accounts with a local distribution company (LDC).
As part of her examination of the Ontario Energy Board’s effectiveness in ensuring reliable electricity service at fair prices, Auditor General Bonnie Lysyk recommends the Ministry of Energy conduct a new objective analysis of USMPs’ administrative levies. She also urges a halt to service disconnection during the cold weather months, which would align with rules already in place for LDCs.
Looking back to the Ontario government’s 2019 legislation repealing the Ontario Energy Board’s authority to regulate USMP fees, the auditor general’s report concludes it was premised on imbalanced evidence that should now be reassessed. That included estimates that the burden of complying with regulations would cost the sub-metering industry $1.3 million annually, which would largely be passed through to customers, and the theory that competition among USMPs would help insulate customers from higher rates.
“The competitiveness assessment of Ontario’s sub-metering industry was performed by a consultant engaged by an association that represents the province’s largest USMPs. The Ministry did not conduct a study to assess whether USMP prices were fair in comparison to those charged by LDCs and whether an alternative to rate regulation would provide an improved level of protection for USMP customers,” the auditor general’s report states.
The auditor general also recommends that the OEB develop a publicly available scorecard of USMP performance to provide more transparency for the condominium boards, landlords or developers that could be contracting USMP services and for unit owners and tenants in multifamily buildings. These would serve a similar function to the scorecards the OEB already publishes for LDCs.
