Ontario passes new Energy Consumer Protection Act

June 17, 2010

On April 22, 2010, the Ontario legislature passed Bill 235, which when it comes into force will create a new Energy Consumer Protection Act and amend the Electricity Act, 1998. The principal aim of the legislation is to enhance consumer protection and energy conservation through new rules for gas marketers, electricity retailers, landlords, and condominium developers.

The new legislation sets the framework for increasing the use of smart meters by individual units in multi-residential buildings (referred to as "suite metering"). According to the Minister of Energy and Infrastructure, empirical data indicates that energy consumption drops between 12%-22% when unit owners are responsible for personal power bills. The legislation will enable the government to provide guidance on suite metering, and also addresses concerns related to suite meter companies and tenant rights.

The most significant element of Bill 235 is that it provides for rate regulation of suite metering providers by the Ontario Energy Board. This provision was included in Bill 235 despite the opposition of smart sub-metering providers, who argued before the legislature that the industry is competitive and does not require rate regulation. However, the legislation does provide the government and the Board with the ability to rate regulate some segments of the industry while leaving others subject to competition. It remains to be seen how the government and the Board will exercise that power.

In addition, the provisions of Bill 235 will empower the government to regulate issues such as:

  • Specifications for suite meters
  • Designating when the installation and use of suite meters is permitted or required
  • Creating energy efficiency requirements for units with sub-meters
  • Information obligations for suite meter providers and landlords to customers and tenants

Bill 235 will also add significant amendments to the Residential Tenancies Act, 2006, including new rules for landlords that intend to transition their units to suite metering. This includes requirements to obtain a tenant's consent, to provide a rent reduction, and to maintain a rental unit's energy efficiency in terms of insulation and major appliances.

The other major goal of the legislation is to provide greater consumer protection. According to the Minister, the Ontario Energy Board receives on average between 100 and 150 consumer complaints about the practices of gas marketers and electricity retailers every week. The new Energy Consumer Protection Act created by Bill 235 will provide greater protection to energy consumers and enable the Board to "crack-down" on industry practices that violate the new Act.

The Board will also have the power to regulate issues such as the form of contracts and invoices, the availability of information in other languages, contract renewals, extensions and amendments, and enhanced rights for contract cancellation including a 10-day cooling off period. The Board will also be able to make regulations on security deposits and service cancellations.

Finally, the legislation will also empower the Board to make regulations respecting the employees of energy providers. This includes the power to issue directives on employee training, identification requirements such as badges, and background checks on employees. Employees may also be subject to new licensing and insurance requirements.

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