Hydro Ottawa customers zapped with higher distribution charges over the next five years

A Hydro Ottawa vehicle is seen in this undated photo. (CTV Ottawa)

OTTAWA — Hydro Ottawa customers will be paying more for electricity in the New Year.

The Ontario Energy Board (OEB) has issued a "decision and order" to approve a settlement proposal from Hydro Ottawa to increase the monthly distribution rates on hydro bills for five years, starting in January 2021. The monthly charge for distribution on Hydro Ottawa bills will increase $3.77 a month by 2025.

Under the settlement plan, Hydro Ottawa would increase the distribution portion of hydro bills for residential customers using 750 kWh per month:

In a statement to CTV News Ottawa, Hydro Ottawa says the distribution rates in the Ontario Energy Board's decision and order for its application are still not final and may change when the OEB issues the final rate order in the next couple of weeks.

The current monthly distribution charge is $28.64. Under the rate increase, the distribution charge will increase to $29.36 a month in 2021 and $32.41 by 2025.

Large use and general service customers may also see increases in the distribution charges over the five-year period.

Hydro Ottawa applied in February to increase the distribution rates for electricity to boost spending on capital projects.  The utility said the rate increase would cover the cost of capital investments to maintain system reliability and safety, and invest in infrastructure and equipment. The filing for the Ontario Energy Board outlined $503 million in capital investments over five years, including new distribution stations in growing areas of the city, replacing equipment that has reached the end of life and upgrading and modifying infrastructure to improve reliability and capacity on the grid.

Hydro Ottawa's initial proposal called for an average 4.4 per cent hike in month distribution charges. It would have cost $29.95 a month in 2021 and $35.56 a month in 2025.

The Ontario Energy Board says it received 15 letters of comments from individuals. Intervenor status was granted to eight parties, including the Building Owners and Managers Association, School Energy Coalition and Environmental Defence. Following a settlement conference, Hydro Ottawa filed a settlement proposal setting out an agreement on the rate hike in September.

As part of the settlement, the Ontario Energy Board says Hydro Ottawa reduced its proposed capital additions and operations, maintenance and administration costs for the period, allowing for a lower distribution charge increase.

Hydro Ottawa tells CTV News Ottawa that while the Ontario Energy Board rates are lower than proposed by utility, "the funding approved by the OEB is sufficient for Hydro Ottawa to maintain our system in a safe and reliable manner, invest in our infrastructure and equipment, and respond to customer growth over the next five years."

Hydro Ottawa is the third largest municipally-owned distributor in Ontario. It serves approximately 340,000 customers a day.