Ontario to Launch Low-Income Electricity Support Program

We welcome the announcement by Ontario’s Minister of Energy, on March 26, 2015, of a proposed support program for low-income electricity consumers. In addition, Ontario’s Debt Retirement Charge will be removed from the electricity bill of all residential consumers.

Our congratulations to the Low-Income Energy Network (LIEN), which has been fighting for affordable energy rates for low-income consumers since 2004.

We take particular pleasure in this announcement as Paul was counsel to LIEN in a series of proceedings  before the Ontario Energy Board (OEB), culminating in an appeal in 2008 in which Ontario’s Divisional Court confirmed that the OEB has jurisdiction to fix or approve affordable rates. (Advocacy Centre for Tenants-Ontario v. Ontario Energy Board)

Theresa McClenaghan, Executive Director, Canadian Environmental Law Association (CELA) and a Founding Member of LIEN said of the announcement:

” LIEN commends the Ontario government for establishing the Ontario Electricity Support Program. This program closes the loop in terms of addressing energy poverty in Ontario and is part of a comprehensive approach to the challenge that LIEN has been advocating for since 2004. We look forward to sharing program information with our stakeholders and the public.”

The proposed Ontario Electricity Support Program (OESP), to be administered through the Ontario Energy Board, will come into effect on January 1, 2016 and will help low-income Ontarians by providing them with financial assistance.

How it Works

The OESP could benefit more than 500,000 low-income Ontario households. The recently updated Statistics Canada Low-Income Measure (LIM) will be used to determine eligibility for consumers of electric utilities, unit sub-meter providers and retail energy companies.

Consumers must apply or opt-in to the program, which will be administered by a central service provider. Ontarians requiring assistance with the application process will be supported by local social agency partners, to be determined.

A tailored process for communications and intake assistance will be developed for First Nations and Métis communities to help address their unique needs.

Once qualified, consumers will continue to also have access to a suite of low-income conservation programs to encourage reduced electricity use.

Funding for the program will come through a per kilowatt-hour charge on electricity bills. The Independent Electricity System Operator will manage the collection and distribution of funds to utilities (local electricity distributors and sub-meter providers). Utilities will apply OESP credits to customers’ bills.

The average credit is estimated to be $27, but will change depending on the number of residents and annual income per household.

A second funding level is also being considered for customers with special electricity requirements, such as electric heat, medical devices requiring electricity and First Nations and Métis consumers.

SOME QUICK FACTS

  • Removing the Debt Retirement Charge will save the typical residential electricity ratepayer $5.60 per month.
  • Electricity represents a significantly greater share of monthly expenses for low-income households than for higher-income households. Low-income households spend as much as 10% or more of their income on electricity bills, while consumers in the highest income bracket only use 2% or less.
  • The proposed OESP will be ratepayer funded with an estimated charge of less than one dollar a month for a typical residential customer in 2016.
  • The implementation of the OESP will follow the conclusion of the Ontario Clean Energy Benefit on December 31, 2015. The Ontario Clean Energy Benefit started in 2011 for a five-year term and provides approximately $1 billion in relief to eligible consumers annually.
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