Blog Post

Ontario Government Plans Changes to OEB Act, Including New Disconnection Rules

Recently, the Ontario Government introduced the second reading of Bill 27, which is titled Burden Reduction Act, 2016 (Bill 27). This is "omnibus legislation" that proposes changes to a large number of statutes with the objective "to reduce the regulatory burden on business and achieve a cost savings for government." Among other things, Bill 27 proposes to amend the Ontario Energy Board Act, 1998 (OEB Act) in a number of ways related to customer disconnections, deferral and variance account review and oversight and review of transactions between electricity generators and transmitters/distributors.

Potentially the most significant aspect of Bill 27 is the inclusion of new provisions of the OEB Act that would permit the OEB to make Rules about times of year when gas and electricity distributors cannot disconnect low-volume consumers. Presumably, this would permit the OEB to prevent disconnections during the winter heating season, even where a customer is in arrears. While there are currently protections from disconnections for low-income customers (set out in the Distribution System Code and in the gas distributors' Conditions of Service), it appears that the OEB or the Government may want to extend such protections. This could be in part due to increasing focus in the media, and by the OEB, on the number of customers who are being disconnected for non-payment. In a recent post, we discussed an OEB report that provided data about the number of residential customers in arrears on their electricity bills, and the number of disconnections.

Bill 27 also proposes to remove the mandatory annual or quarterly OEB review of deferral and variance accounts for gas and electricity utilities. Under the updated provisions of the OEB Act, the OEB would simply be required to review and make orders on deferral and variance account balances "from time to time" (or as prescribed by regulation). This approach would seem to support a move to less regular OEB hearings, especially during the course of incentive regulation plans. That would be consistent with the guidance and direction set out in the OEB's recently issued Handbook for Utility Rate Applications (discussed in an earlier post).

Additionally, Bill 27 includes changes allowing the OEB to establish criteria exempting one or more classes of transactions or construction activities from the OEB Act prohibitions against distributors/transmitters owning or constructing generation facilities and vice-versa. Presumably, the reason for these changes will become clearer if and when the OEB publishes exemption criteria.

As mentioned, Bill 27 is currently at the second reading stage. There have not yet been any committee hearings to discuss the implications of the proposed legislation. It is not clear when the legislation may be passed, or when it would be effective. Additionally, much of the impact of the proposed changes to the OEB Act will not be clear until the OEB makes new Rules and criteria in response to the changes.