Sudbury hydro refund small percentage of total overcharged

Despite a 'small, historic' billing system error by Greater Sudbury Hydro dating back to at least 2005, the electricity company will only have to provide refunds for four years of the overpayments.

The issue affecting all rate classes was discovered in March 2021, the Ontario Energy Board said in a news release Tuesday.

Due to a rate calculation error, Greater Sudbury Hydro "has been recovering slightly more revenue from fixed charges than the tariffs allow on an annual basis," the hydro company said in a statement of facts as part of an Assurance of Voluntary Compliance (AVC).

"So our billing system calculated that on a daily rate incorrectly. So instead of taking the approved monthly amount and multiplying it by 12 and then dividing it by 365 to arrive at a daily rate, which would make sense, this system divided the monthly charge by 30 and then multiplied by 12. You see, it just did it a little (backward), which made it look like there were 360 days in a year instead of 365," Wendy Watson, a spokesperson for Greater Sudbury Hydro, told CTV News.

"The overcharge per residential customer on system supply was equal to $4.89 for the service charge plus $0.208 for all other residential fixed charges for a total annual over-collection of $5.09," the AVC said.

When the northern Ontario hydro company reported the issue, it "quickly applied an interim measure to prevent further overcharging; a measure which Greater Sudbury Hydro has assured the OEB will be kept in place until a permanent solution is implemented."

"We were absolutely shocked when we discovered it and it’s such a small error," Watson said. "It’s been happening for quite a while. We can determine that it’s gone back at least as far as 2005."

Greater Sudbury Hydro will refund approximately $919,000 "through a one-time credit that will appear on customer bills within 90 days," the OEB said in a news release Monday.

"Every customer in a rate class will receive the same credit amount... regardless of whether the customer was actually a customer for the entire four-year refund period," the AVC said.

The company said it has approximately 43,000 active residential customers and each will receive a credit of $17.61 per account. It is based on the years 2017 to 2020.

"What the Ontario Energy Board told us to do is credit existing customers back for four years for the error. That’s where the four years (come) from, but this is a historic error," Watson said.

"We take our customers very seriously. We value them and we’re aware that they put their faith in us to deliver their electricity as reliability as possible and they want their distribution charge to be as low as possible and we will continue with our mandate to distribute electricity reliably, efficiently and to deliver it with a distribution charge as low as possible."

Greater Sudbury Hydro will pay a $5,000 administrative monetary penalty to the energy board for the error. The company is a subsidiary of Greater Sudbury Utilities. 

With files from Alana Pickrell, CTV News Sudbury reporter