Electricity Distributors Support NDP call to Eliminate Residential Retail Contracts

Electricity Distributors Association

TORONTO, March 5, 2014 /CNW/ - The Electricity Distributors Association (EDA) commends today's call from Andrea Horwath, leader of Ontario's New Democrats, to curtail fixed commodity price retail electricity contracts for residential customers. The EDA is calling for prompt legislative action to make this a reality.

Electricity retailers were allowed to enter the Ontario marketplace during the short-lived experiment with deregulation of the early 2000s. They have continued to pursue contracts with residential customers since then, despite the return to regulated electricity rates. Ending this anomalous situation is one of the key recommendations put forward by the EDA as part of its vision for pursuing efficiencies and cost savings for the benefit of the province's electricity consumers.

The EDA estimates that roughly a million Ontarians are currently supplied with electricity at their homes under the terms of retail contracts. It's further estimated that, on average, they incur a monthly commodity cost of approximately $105, in contrast to $70 for those who purchase electricity directly from their local utility and under price plans regulated by the Ontario Energy Board (OEB).

Energy retailers have also accounted for an inordinate number of complaints to both the OEB and MPPs, due to concerns with matters such as door-to-door sales tactics and questionable renewal procedures. This has required expanded regulatory oversight and associated costs. Residential retail contracts also provide less protection from future price increases than consumers may believe, since most projected increases will be included in the "global adjustment" which is added on top of the retailer price.

An estimated $130 million in annual savings could be realized through the curtailment of energy retailers in the residential sector. These are among total annual savings for ratepayers of more than $400 million that could be realized if all recommendations in the EDA's vision for the electricity distribution sector were acted on.

"Our customers want practical and meaningful steps taken to reduce electricity costs," says EDA Chair Rene Gatien. "We've responded by identifying many efficiency opportunities in our Power to Deliver vision document, and curtailment of energy retailers in the residential sector remains one of the largest single potential savings."

Gatien notes that the EDA has already leant its support to an NDP private member's bill to eliminate retail contracts, which has passed second reading. "We call on MPPs from all parties to act in the interests of Ontario energy consumers and to support Bill 132," says Gatien. "And we welcome the further impetus for action on this important matter that today's announcement represents."

About the EDA
The Electricity Distributors Association (EDA) is the voice of Ontario's local electricity distributors, the publicly and privately owned companies that safely and reliably deliver electricity to nearly five million Ontario homes, businesses and public institutions.

Image with caption: "Electricity Distributors Association (CNW Group/Electricity Distributors Association)". Image available at: http://photos.newswire.ca/images/download/20140305_C9339_PHOTO_EN_37601.jpg

SOURCE: Electricity Distributors Association

For more information and to arrange interviews please contact the EDA's Director of Corporate Affairs and Communications, Kevin Hanson, at [phone] / [phone].