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Nov. 30, 2021 | Tuesday
Editorials and Opinions
Saturday's power outage could cost NOTL residents over $80,000
Niagara-on-the-Lake Hydro. (File)

Tim Curtis

Special to The Lake Report

Saturday's unexpected power outage will cost Niagara-on-the-Lake Hydro's customers a lot more than just being without power in the early hours of the morning. 

Due to the methodology the Ontario Energy Board allows transmitters to bill for their service, NOTL Hydro estimates it will have to pay over $80,000 more than it otherwise would have been billed for the month of October.

And this money will go to Hydro One, the transmitter responsible for the lines that went out.

Included in the delivery charge on every customer’s bill is an amount for the cost of transmitting the power to NOTL by Hydro One. 

Under rules set by the Ontario Energy Board, NOTL Hydro is charged for transmission based on the peak hourly loads at each of our two transmission stations, in NOTL and on York Road. 

Because NOTL Hydro is charged based on each station's load rather than the total load, NOTL Hydro is exposed to potential double billing if the sum of each station's peak is higher than the total peak. 

Hydro usage is monitored continuously and if peak usage at any point during a month is say, 40 MW, we try to ensure the sum of the peak usage by each NOTL station does not exceed 40 MW. If the peak usage of both stations adds up to, say, 45 MW, then NOTL Hydro is billed for that larger amount.

In a normal month, NOTL Hydro manages its power so that the two stations' peaks are as close as possible to the total peak.

Earlier this year, NOTL Hydro was advised by Hydro One that due to work being done on the transmission line, on one day in October no power would be delivered over the line that serves the NOTL station. All the power to serve NOTL would have to be from the York station that day. 

To prevent the double billing scenario, NOTL Hydro shut down the NOTL station for the full month of October. Otherwise, we would have a full peak load on the York station and a regular load on the NOTL station during the month, leading to the double billing. NOTL Hydro planned to use the NOTL station down time for some maintenance work.

In the early morning hours of Saturday, Oct. 9, power on the transmission line serving the York station was disrupted, meaning the entire Town of NOTL was without power. (This was not the line that Hydro One was doing repair work on.)

To minimize the potential length of the outage, the decision was immediately made to bring the NOTL station back on line as soon as possible to bring power back to the town. 

In making this decision, we knew there would be a cost. What we could not know with any certainty was how long the power would be out and, more importantly, what was the value of this electricity to the businesses and residents of NOTL during this time.

NOTL Hydro estimates the incremental costs of this decision, due to the double billing described above, will be more than $80,000 – about the amount our utility would have incurred if it had kept both stations operating for the full month of October and been double billed as a result.

Eventually, that amount will be passed on to the 10,000 customers of NOTL Hydro, meaning it will cost the average user about $8.

NOTL Hydro customers will not see this cost until 2023 and it will be spread over the full year in line with energy board regulations.

In the meantime, the energy board has promised a hearing in 2022 that will include looking at this double-billing issue. NOTL Hydro will be participating in the hearing to try to get these rules corrected so that situations like the expense from this outage no longer occur.

Tim Curtis is president of NOTL Hydro.

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