Last Revised: July 11th, 2008

Deposits

Welland Hydro-Electric System Corp. (WHESC) is regulated by the Ontario Energy Board (OEB) by the powers granted to them by the Ontario Provincial Government through the enactment of Bill 35 1998; The Energy Competition Act, Schedule A; the Electricity Act and Schedule B; the Ontario Energy Board Act 1998 (the Acts).

The Acts provides WHESC with guidelines to carry out the administration of their utility company. WHESC is provided authority to establish Credit, Collection and Disconnection policies through the guidelines established by the Retail Settlement Code, the Standard Supply Service Code, and the Distribution Rate Handbook. WHESC has the right to protect against non-payment of bills from all customer classes in its service area by the use of security deposits.

With the enactment of Bill 35, the Energy Competition Act, local Municipal Electric Utilities (MEUs) were required to incorporate under the Ontario Business Corporation Act (OBCA). Under the laws of the Municipal Act and the Utility Power Corporation Act, the MEUs had the ability to collect any outstanding arrears by placing a lien on the owner’s property. Once the Utility incorporated as an OBCA corporation, it no longer had the powers to tax role a customer’s utility bill. This guideline provides a means of security from non-paying customers with the primary objective of reducing the number and amount of potential annual write-offs a utility may experience due to poor customer payment practices. 25

Security deposits will be required from all new customers, with no distinction or preference between Classes of customers as well as Standard Supply Service (SSS) customers or Retailer supplied customers i.e., Residential; owners and tenants, General Service Customers; <50kW & >50Kw and Large Industrial Customers; 5000Kw. The amount of the Security Deposit for each class will be discussed.

General Service and Large Industrial Customer’s Deposits

All new general service and large industrial customers, requesting an electrical service to be established will be required to pay a Security Deposit prior to the service connection or must have a written agreement to pay within an agreed time period arranged with the Customer Service Supervisor. Failure to pay by the agreed date will result in the service being disconnected.

All new general service and large industrial customers will be required to provide the utility with a security deposit of:

New Residential Customers — Owners & Tenants

All new residential customers requesting a new service to be established will be required to pay a Security Deposit prior to the service connection or must have a written agreement to pay within an agreed time period arranged with the Customer Service Supervisor. Failure to pay by the agreed date will result in the service being disconnected.

All new residential customers will be required to provide the utility with a security deposit of;

A customer arranging a new service in a location with previous history will have their security deposit estimated based on previous location history.

Types of Security Deposits

1. Residential Deposits: Cash, Current Dated Cheque, Certified Cheque, or Interac (where Available).
2. Non-Residential Consumers: Cash, cheque, an automatically renewing irrevocable Letter of Credit from a Chartered Bank, Trust Company or Credit Union as defined in the Bank Act 1991, C.46, in a form acceptable to WHESC, valid for a minimum good payment history period, as per Security Deposit Exemptions section below.

Security Deposit Exemptions

The following exceptions may apply at the discretion of WHESC when determining a security deposit for the residential customers i.e. Security Deposit may be waived under the following provisions:

1. Residential Customer — continuous good payment history for 1 year.
2. Non-Residential customer < 50 KW — good payment history for 5 years.
3. Non-Residential customer > 50 KW — good payment history for 7 years.
4. Letter of reference from other electrical or gas utilities in Ontario with confirmation that the customer has met the customer criteria as stated in this section. The payment history must have occurred in the past 24 months in order to qualify for an exception.
5. A customer, other than in a > 5,000 KW demand rate class, provides a satisfactory credit check at the customer’s expense.
6. A customer with a ‘Good Payment History’ is defined as a customer with (for defined periods):
   • one or less cheque returned for insufficient funds
   • one or less disconnection notice
   • one or less pre-authorized payment returned to the distributor
7. Where a non-residential customer in any rate class other than a < 50 KW demand rate class has a credit rating from a recognized credit rating agency, the maximum amount of a security deposit which the distributor may require the non-residential customer to pay shall be reduced in accordance with the following table:
   

   Credit Rating (using Standard & Poor’s Rating Terminology)	Allowable Reduction in Security Deposit
   AAA- and above or equivalent	100%
   AA-, AA, AA+ or equivalent	95%
   A-, from A, A+ to below AA or equivalent	85%
   BBB-, from BBB, BBB+ to below A or equivalent	75%
   Below BBB- or equivalent	0%

The customer must maintain a satisfactory payment history with WHESC. Failure to maintain a satisfactory payment history will result in an immediate security review.

Collection of Security Deposit

Security deposits are required to be paid in full when the customer is making application for service or prior to connection or provision of service i.e., before the service is turned on. The corporation, at its discretion, may extend special payment arrangements to those customers unable to make full payment of the deposit. The maximum time period for payment of a deposit is 4 months.

Review of Security Deposit

Security Deposits will be reviewed annually and after, if necessary, the deposit amount may be adjusted upon the occurrence of any of the following:

• Lack of maintenance of a good payment history
• Anniversary of service installation
• A significant consumption change. Historical consumption used is inconsistent with new consumption pattern which has been established.

Refund of Deposit

1. A refund of the customer’s security deposit may be permitted if the customer retains a ‘Good Payment History’ record. Refunds will only be made available at the request of the customer and not by the initiation of the Corporation.
2. A customer loses ‘Good Payment History’ status by committing any of the violations outlined under the Security Deposit Exemptions section.
3. After the yearly review, all deposits eligible for refund or reduction shall be applied to the customer’s account.
4. If the maximum amount of the deposit is to be adjusted upward, the distributor may require the customer to pay this additional amount at the same time as that customer’s next regular bill comes due.

Delinquent Accounts

If a customer’s deposit is waived due to the provisions under the Security Deposit Exemptions section or a current customer in good standing is in violation of a good payment history, the Corporation reserves the right to require a security deposit from the customer as if the customer was a new customer.

Interest on Security Deposit

Interest shall accrue monthly at the Prime Business Rate as published on the Bank of Canada website less 2 percent, updated quarterly and commencing on the receipt of the total deposit.

Interest shall be paid at least every 12 months or upon closure of the account or when a deposit is refunded to an account, whichever comes first.

Interest payments shall be a credit to the account.

Billing

WHESC will render bills to all it’s customers on a monthly and bi-monthly basis for all applicable services. Bills for electrical energy consumption may be based on either a metered or estimated consumption, as determined by WHESC. When an actual meter reading cannot be obtained from the meter for 3 scheduled reads, the estimated billable consumption will be inflated to obtain the customers awareness of the repeated estimations. WHESC requires a minimum of 1 actual meter reading by WHESC personnel in each calendar year. If an actual metering reading cannot be obtained, the electrical service will be subject to disconnection pending arrangements to allow a reading by WHESC personnel.

Bills are payable in full by the due date, otherwise an interest charge will apply on all amounts outstanding after the due date. Where the Customer has made a partial payment on or before the due date, interest charges will apply to any outstanding amount left owing after the due date. Interest is calculated on all charges including arrears and is calculated daily. Outstanding bills are subject to the collection process and services may be disconnected. Service will be restored once satisfactory payment has been made. Disconnection of service does not relieve the customer of the liability for arrears. WHESC shall not be liable for any damages on the Customer’s premises resulting from such discontinuance of service. A reconnection charge will apply where the service has been disconnected due to non-payment.

Prorating of Service and Demand charges will be performed at the discretion of the WHESC.

Billing Errors

Billing errors will be resolved as per Section 7.7 of the Retail Settlement code.

1. Billing errors that have resulted in the over billing of a customer account or Retailer account will be credited to the customer in the amount erroneously billed the customer by the distributor for a period of six years.
2. Billing errors that have resulted in under billing of a customer account, the distributor will charge the customer the amount that was not previously billed for a period not exceeding:
   
   1. Two years, in the case of an individual residential customer who is not responsible for the error.
   2. For non-residential consumers or for instances of willful damage, the relevant time period is the duration of the defect.
   3. Where a retailer is involved, the retailer will be credited or charged as per (i) or (ii) above.
3. The entity billing a consumer, whether WHESC or a retailer, is responsible for advising the consumer of any meter error and its magnitude and its obligation to inform the customer of the assistance provided by Measurement Canada in a dispute investigation. The billing entity is also required to inform the consumer of its obligations under the Federal Electricity and Gas Inspection Act (Canada) where a dispute between the customer and the entity exist over the condition or registration of a meter installation is in question.

Final Bills

1. Forwarding Address
   • The Security Deposit will be applied to reduce the Final Bill within 6 weeks of the closure of the account.
   • If the Security Deposit for the current account is not sufficient to pay the entire final bill amount and the customer is moving into a forwarding address located within the Utility’s service area, the balance will be transferred to the new account.
   • If the forwarding address is within the Utility’s service area and the customer is moving into the new forwarding address location, the customer will be provided the option to transfer the balance to the new account or use the Security Deposit to pay the bill and the new Security Deposit will be calculated accordingly.
2. No Forwarding Address
   • The security deposit will be applied to reduce the Final Bill within 6 weeks of the closure of the account.
   • If the security deposit is not sufficient to pay the entire final bill amount and the customer moves out of the utility’s service area and is no longer a WHESC customer, utility staff will make an attempt to locate forwarding address. If no results, it will be referred to collection agency.

Payments and Service Charges

Payment of Bills

The customer must make payment of any outstanding accounts to the Corporation on the due date as identified on the bill. Bills are due on date of mailing or hand delivery of the bill. No interest will be charged until after the due date printed on the bill.

Where a payment is paid by mail, the payment will be deemed to be made on the date received by the utility. Where a payment is made at a financial institution acceptable to the Corporation, the payment will be deemed to be made when stamped/acknowledged by the financial institution. A partial payment will be applied to any outstanding arrears before being applied to the current billing.

Late Payment Charge

Late payment charges will apply to any arrears paid after the due date of the bill. Late payment charges will be charged at an interest rate as determined by section 9.3.3 (iii) of the Electricity Distribution Rate Handbook. WHESC charges a common commercial interest rate of 1.5% per month on all outstanding balances as approved by the OEB.

Collection Charge

It is sometimes necessary, for the Customer’s convenience, for a WHESC employee to visit a Customer’s premises to collect payment for an account. There will be a charge for this service.

Reminder/Disconnect Notices

Reminder Notices will be issued 5 (five calendar) days after the due date, unless payment has been received or mutually agreed arrangements have been made. Disconnect/Settlement Notice will be issued 7 (seven) calendar days after the Reminder Notice unless payment is received or mutually agreed arrangements have been made. The Disconnect/Settlement Notice will allow seven days for payment prior to customer disconnection due to non-payment.

Reconnection of Electrical Service

Disconnection of the service will be the last resort and only takes place after all the notices have been issued. Should the account be disconnected reconnection collection charges will be applied to the account and full payment must be received in the WHESC’s office before reconnection is made to the service. If the customer requests the service to be connected after normal hours of work, full payment must be made by 11:00 AM the following day. Overtime charges will be applied for all reconnections of services after hours.

Load Limiters

Load limiters may be used as alternatives to disconnecting the customer’s service from the Distribution gird. Load limiters may be used specifically during the winter months. The intent for the use of load limiters is that it may encourage the customer to pay the utility bill while maintaining supply of current to operate a furnace for heating the home. Load Limiters are considered to be disconnection of service and all appropriate disconnection fees apply.

Returned Cheques

Any cheque payments rejected (NSF) by the bank, for whatever reasons, should be acted upon immediately by the Customer. The payment will be reversed on the customer’s account and an appropriate returned cheque fee charged. The Customer Service Representative will follow steps as outlined in section 12 of this guideline to notify the customer and collect the outstanding amount. WHESC will only accept cash, certified cheques or money orders for payment of bills originally paid with NSF Cheques. The approved NSF fee will be charged to the Customer’s account.

Temporary Electricity Services

Temporary electricity services, including community decorative lighting may be provided at regular residential or general service rates as applicable. The utility may prorate the account, based on the number of days the service was in use. The customer will be requested to pay for any additional cost of erecting and removing any additional equipment required and a rental charge applied for transformation equipment supplied for the service.