In a decision dated January 27, 2010, the Ontario Energy Board ruled that Toronto Hydro breached the Electricity Act by refusing to connect hydro service to the bulk meters of new condominium projects unless all units in the condominium are individually smart-metered by Toronto Hydro and become a customer of Toronto Hydro.

The Board found that, in addition to breaching the statutory requirement to provide electrical service to buildings within the local jurisdiction, Toronto Hydro’s refusal to provide the hook-ups effectively precludes condominium corporations or developers from the option of using services of licensed smart sub-meter providers.

This highly anti-competitive behaviour is surprising, especially since nothing in Toronto Hydro’s license grants it the type of monopoly it was attempting to exercise by refusing to hook up new condo projects. Toronto Hydro raised a number of justifications for its conduct, including that the public interest is better served by this policy, but the Board rejected this, finding that these policies are actually contrary to the public interest.

Toronto Hydro also argued that its anti-competitive policies furthered the energy-conservation objectives of the Green Energy Act. The Board did not agree with the concept that the environmental imperative should trump the necessity to maintain competition in the energy market.

The Board will hear arguments and then issue a remedy (or “sentence”) in the coming weeks.  Update:  A Compliance Order was issued on February 22, 2010.  See here (pdf).

The decision serves as a reminder that energy consumers have the ability to complain to the regulator and seek recourse when faced with strong-arm tactics and anti-competitive behaviour by utilities and service providers. In this case, the condo developers were faced with a brick wall at Toronto Hydro and they pushed back, taking this matter to the OEB.

Condominium boards should resist the pressure to hastily enter into unfavourable contracts for the installation of sub-meters, be it with their local public utility or with private sector providers. Boards need to get legal advice, call the OEB if faced with questionable or unethical business practices, and take the necessary time to consider the various options for proceeding with a sub-metering project and the ramifications of each one.