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Strengthening Consumer Protection in Ontario's Energy Sector

Backgrounder

Strengthening Consumer Protection in Ontario's Energy Sector

Ministry of Energy

Ontario is enhancing the capabilities of the Ontario Energy Board (OEB) in order to further protect electricity ratepayers by boosting consumer protection and improving the ability to ensure the continuity of service. The OEB has sole responsibility to set electricity rates for Ontario.

Some of the main legislative amendments being proposed include measures to enhance consumer protection, provide further opportunities for consumer advocacy, clarifying the role of Local Distribution Companies (LDCs) and their affiliates, extending OEB's emergency powers to transmission, enhancing the oversight of utility transactions and the ability for government to prioritize critical transmission infrastructure.

Enhancing Consumer Protection

The proposed Strengthening Consumer Protection and Electricity System Oversight Actincludes changes to the Energy Consumer Protection Act, 2010 (ECPA)  that would prohibit electricity retailers and gas marketers to sell energy retail contracts at the consumer's home while still allowing retailers and marketers to engage in advertising activities at the door.  The government would also be given authority to make rules governing aspects of the door-to-door advertising activities in regulation.

There are also a number of other proposed amendments to enhance consumer protection.  For example, stricter parameters are being proposed around contract verification.  Currently, only contracts signed in person are subject to a verification process.  Proposed enhancements would ensure that all contracts, including internet, are subject to the same process.  There are also proposed amendments to extend the cooling-off period during which consumers can cancel an energy contract without penalty from 10 to 20 days.

As well, the legislation also includes proposed changes to the Ontario Energy Board Act, 1998 (OEBA) that would provide the OEB with the ability to levy higher and more flexible penalties for contraventions of its rules and legislation.

 Advocating for Consumers

Ontario is proposing legislative enhancements that could allow the OEB to establish measures to enhance the current representation of the interests of consumers in OEB proceedings.  This would provide additional opportunities for consumer representation.

Clarifying the Role of Local Distribution Companies (LDCs) and their Affiliates

Currently, legislation restricts the business activities of affiliates of municipally-owned LDCs, but does not include any such restrictions on the business activities of non-municipally owned LDCs.

Proposed enhancements would remove the restrictions on the business activities for affiliates of any municipally-owned LDC, putting them on the same footing as privately or provincially-owned LDCs.

Extending OEB's Emergency Powers to Transmission

Currently, legislation provides the OEB with powers to ensure that continuity of service for distribution company customers would carry on in the event of an emergency. Under the proposed legislative enhancements these powers would be extended to transmission companies. In addition, some enhanced power to help head-off a potential emergency have also been introduced.  

Enhanced Oversight of Utility Transactions

The current legislation requires the OEB to examine a transaction that allows someone to gain more than 20 per cent control of voting securities of a transmitter or distributor. The proposed legislative amendments reduce this to 10 per cent to account for more widely held ownership anticipated in the future.

In addition, the proposed legislative amendments would require that distributors maintain their head offices and records in Ontario.   

Creation of Transmission Infrastructure

Currently, the Ministry has the ability to issue OEB directives regarding the connection of renewable energy generation.

Proposed enhancements would include a new tool that would allow Cabinet to determine key transmission infrastructure to be built by licensees that would not go through a 'needs' test by the OEB.

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