Over $21,000 in Kingston Hydro overcharges due to ‘miscalculations’

Kingston Hydro Corporation, which serves approximately 28,000 customers throughout central Kingston, incorrectly billed select customers over the past four years, resulting in more than $21,000 in over-collected charges from the corporation. According to an Assurance of Voluntary Compliance (AVC) issued by the company, the over-collections were a result of miscalculations involving its prorated fixed monthly charges. 

In terms of the number of customers impacted by the miscalculations, a representative from the City of Kingston’s communications department says the number of affected customers “ranged from 7,000 to 14,000.”

While the company did charge customers in accordance with the rate order for monthly charges approved by the Ontario Energy Board (OEB), there was a discrepancy between the calculated number of days in each month, and the number of days customers were actually billed. The AVC arose from a notice issued by the OEB in April 2022, after it was discovered that one of the province’s energy providers had been overcharging customers as a result of daily rates which were incorrectly prorated. 

“While the distributor used the approved fixed monthly charges from its OEB-approved rate order, its billing system translated these monthly charges into a daily charge for application to customers’ bills,” the AVC notes. “In the translation from monthly to daily charge, the daily charge was calculated on the basis of there being 30 days in every month (or 360 days in a year), but billed customers 365 days a year, leading to an overcharge of each customer.” 

After the issue with that particular provider was discovered last April, the OEB then sent a letter to all energy providers in the province, asking them “to review their billing systems and to advise the OEB if they discovered the same proration issue.” According to the statement, on June 29, 2022, Kingston Hydro self-reported a similar proration issue. 

According to the AVC, “the proration issue applied to all impacted bills’ fixed monthly charges across all rate classes, except for street lighting, as [those] charges are calculated outside of the billing system on a monthly basis.” The notice does indicate that all other Kingston Hydro Corporation customers were charged the correct fixed monthly rate. 

In terms of how long impacted customers were overcharged by Kingston Hydro, the AVC notes that the issue “persisted for several years.” As of June 12, 2022, the company has instituted the necessary changes to its billing system, “to ensure customers would not be overcharged due to the incorrect proration of fixed monthly charges.”

As a result of the billing issues, the company admits it overcharged customers by $21,878 over the past four years, which works out to an average of $5,470 per year. Due to the “relatively small” nature of the over-billing, Kingston Hydro has agreed to make a payment to the province’s Low-income Energy Assistance Program (LEAP), serving Kingston Hydro’s service region, as opposed to issuing refunds or credits to the affected customers. 

LEAP is meant to provide emergency financial assistance for those whose income falls below a certain threshold. Eligible customers are able to receive up to $500 in emergency assistance when they fall behind on their electrical bills.

As for why Kingston Hydro opted against issuing refunds or credits to impacted customers, the AVC states “a four-year customer credit would be small, and… many customers who received impacted bills, such as university or college students, are no longer customers of KHC and therefore difficult to track down.” 

Instead, Kingston Hydro will pay $21,878 to the LEAP; the exact amount of money received in overpayments. Once the contribution to the LEAP has been made, the AVC states that impacted customers will be notified of the contribution and the AVC. Kingston Hydro Corporation has also agreed to pay an administrative penalty of $2,500 to the OEB.

Kingston Hydro Corporation’s Assurance of Voluntary Compliance was issued on Friday, Feb. 10, 2023. Five days later, on February 15, Brian Hewson, Vice President of Consumer Protection and Industry Performance for the Ontario Energy Board, notified Kingston Hydro that he had “reviewed and accepted” the corporation’s AVC. 

As for Kingston Hydro’s response to customers who may be frustrated to learn they were overcharged for up to four years, the City’s communications representatives say, “we reassure our customers that Kingston Hydro is committed to reliable and accurate customer billing, and we apologize for the error. As soon as we became aware of the issue, we took immediate and voluntary action to correct it.”