Newmarket-Tay Power is paying penalties amounting to $37,600 in the wake of an investigation by the Ontario Energy Board (OEB) into the local utility's disconnection practices.
The OEB found that 56 customers had their electricity disconnected and were charged reconnection fees after the utility sent out 4,745 disconnection notices to 2,953 customers from May 1 to July 3, 2019, that were non-compliant with the required notice period.
Under an assurance of voluntary compliance, Newmarket-Tay Power will pay an administrative monetary penalty of $32,000 and make an additional payment of $5,600 to the social agency that runs the local Low-income Energy Assistance Program (LEAP), according to the OEB, which licenses the local electricity distributor, in a Sept. 21 news release.
As well, the disconnected customers received a refund of the reconnection fees, as well as a credit of $100 on their hydro accounts.
The reconnect fee is $50 during regular business hours, and $185 after hours.
"Newmarket-Tay Power has initiated an internal review and an external audit to assess and improve its disconnection and reconnection processes, and assures the OEB that it will update its business practices and extend a moratorium on disconnection of residential customers pending the completion of the external audit," according to the OEB.
Newmarket-Tay Power president and CEO Ysni Semsedini said he is "supportive" of the findings, "but, of course, I'm disappointed we weren't in compliance with OEB standards, but we're making amendments to ensure we're in proper compliance going forward."
He said the external auditor is completing a full audit of all processes to ensure the firm complies with all regulatory standards, not just disconnection processes.
"As soon as we became aware of it, we made ... those changes, but then we also went through and made sure we did a more fulsome audit, so I don't expect anything more to come out of this," Semsedini said.
The OEB's audit enforcement arm regularly does compliance investigations, but they can also be initiated by customer complaints, he said.
Semsedini, who joined Newmarket-Tay Power as president and CEO in March 2020, said he was unaware what prompted the 2019 OEB investigation.
However, similar assurances of voluntary compliances are "commonplace", he added.
For instance, last August, Oshawa PUC agreed to pay a penalty of $20,000 after an OEB inspection found non-compliant disconnection notices were sent to 780 customers in May 2019, 118 of whom had their electricity disconnected.
"My message is, of course, that we're sorry that this has happened. It's never our position to want to do things outside of standard practice, we're always here to help our customers. We're always trying to do better and I think this is a prime example (in that) we initiated some processes that were outside of the OEB's requirements of us and we've made sure our processes are right for our customers going forward."
The website now includes additional information regarding disconnections and customer rights, he added.
Last year, 298 customers were disconnected, and 292 customers the year prior, 2018, which is when the customer base was expanded with the purchase of Midland Power. In 2017, 185 residential customers were disconnected.
A distributor must provide a minimum of 10 days notice to a customer prior to disconnection, identify the earliest date on which disconnection may occur, and provide the amount overdue for payment.
The disconnection notices issued to the 2,953 customers were based on an incorrect calculation of the earliest date on which disconnection may occur, and as a result, these customers were not given proper notice of their possible disconnection, the OEB said.
In addition, the overdue amount for payment incorrectly included amounts for water/sewer arrears, as the OEB does not allow distributors to disconnect a customer for non-payment of charges that do not relate to electricity.
“Under the OEB’s rules, utilities must provide accurate information in their disconnection notices so that customers understand what they owe their utility and have time to take steps to avoid disconnection. When a utility does not follow those rules, customers are at risk of being harmed," Brian Hewson, vice-president, consumer protection and industry performance, said in a news release. "As a result of the actions we have taken, and Newmarket-Tay Power’s assurance that it is aware of its obligations and is taking steps to improve its processes, consumers will be better protected.”
