A new customer information system installed in 2013 is at the heart of widespread billing problems at Hydro One, Ontario Ombudsman André Marin reported Monday.
“Hydro One lost sight of its public interest purpose and failed to adequately consider the impact on its customers,” Marin writes in his report, entitled “In the Dark.”
“Its overconfidence in its technical superiority fostered complacency. It forgot to consider the consequences to its customers.”
During the course of his investigation, the ombudsman received 10,565 complaints from customers across Ontario, including Sudbury. The report cites the case of a local man who received a bill for $19,152 in April 2014 after a long period of estimated bills.
“We learned that his meter was replaced in November 2013, but it took four months to update the system,” the report says. “When the actual readings from his meter arrived, the system then mistakenly charged him many multiples of what he owed. Once the error was corrected, his bill was reduced to $74.”
The report was the largest investigation in the office’s history, which revealed a litany of egregious problems with billing and customer service arising from Hydro One’s disastrous installation of a new customer information system in May 2013, which Marin's office estimates affected more than 100,000 customers.
The report details how problems with the system transition resulted in overbilling – sometimes by thousands or even millions of dollars — no bills, estimated bills and outrageously bad customer service during the scramble to fix technical glitches.
As the crisis deepened, some at Hydro One “deliberately kept the situation under wraps,” Marin writes, “even deceiving the electricity regulator, my office and other stakeholders about the extent and nature of the company’s billing and customer service disaster.”
When calls from frustrated customers flooded in and overwhelmed the company’s outsourced call centre, Hydro One directed the private contractor to pressure staff to keep call handling times down.
“In its external communications, it consistently minimized the scope of the problem and cited a survey that showed its customer satisfaction rate increasing from 78 per cent to 80 per cent the year of the botched system launch,” a release accompanying the report says. “Its customer service recovery ultimately cost the company $88.3 million.”
The Ombudsman announced the investigation in February 2014 in the wake of a spike in complaints about Hydro One. He issued an interim update on the investigation in March 2015, flagging Hydro One’s disturbing practice of deceiving the public by threatening to disconnect customers for unpaid bills in winter, despite its policy never to do so.
“Hydro One has not yet finished learning its lessons from the corporate catastrophe,” Marin says in the release.
He says even as the report was being finalized, Hydro One conceded there were some 5,000 customers still facing the frustration of going many months without bills or receiving estimated bills. Marin also pointed to an October 2014 promise by Hydro One to post a “customer commitment” document online that was still unfulfilled when the report was finalized six months later.
The underlying issue is a “technocratic and inward-facing organizational culture that is completely out of step with public sector values,” Marin writes, making 65 recommendations to the utility, all of which it has accepted.
These include: Better staff training and call quality monitoring; redesigned, clearer bills and a system for issuing refunds, explanations and apologies when warranted; more transparent and reliable statistics; and better communication between management and the board of directors about systemic customer service issues.
He also recommends the government preserve independent oversight of Hydro One once the utility is partially privatized, rather than appointing an internal ombudsman.
“My report clearly documents Hydro One’s failure to communicate openly, honestly and proactively with its customers, its regulator, ministry officials and my office,” he writes. “I am concerned that unless accountability is assured through independent and impartial scrutiny, stakeholders may once again find themselves in the dark.
“Today, Ontario’s accountable and public Ombudsman showed exactly why we need to retain public oversight of Hydro One. Kathleen Wynne’s plan is to remove all public accountability and put it in the hands of the private sector."
NDP Energy Critic Peter Tabuns went a step further, citing Marin's report as a further example why the Liberal government should reverse its plans to privatize Hydro One.
“A corporate ombudsman is only responsible to the corporation, not Ontarians,” Tabuns said in a news release Monday. “We know that cellphone companies, cable companies and even the 407 have ombudsman offices. When was the last time we heard a critical report from those corporate ombudsman offices? There is no substitute for the independent, public oversight of the Ontario ombudsman.
“Ontarians can’t afford to pay the price for the Liberal scheme to sell-off Hydro One. We need strong, independent watchdogs who answer to the public interest, not to shareholders.”
Ombudsman’s investigation by the numbers:
- 10,565: Unprecedented number of complaints, received April 2013-April 2015.
- 4,142 complaints resolved by Ombudsman staff and with Hydro One, April 2013-April 2015. Cases in progress as of May 22, 2015: 330.
- 66 recommendations; 65 for Hydro One (all accepted) and one for the Ministry of Energy (not accepted).
- The Special Ombudsman Response Team conducted more than 190 interviews. Investigators reviewed the digital equivalent of 23,000 pages of information from Hydro One, as well as 151,471 emails.
- Hydro One provides service to 21 remote communities, and some 1.3 million rural and urban distribution customers – issues one million bills per month.
- Call centre staff handle more than 1.5 million customer calls each year.