Ontario's ombudsman says Hydro One "lost sight of its public interest purpose" and failed to consider the impact on its customers of a new information system that resulted in massive billing errors for about 100,000 households.

Andre Marin says his office was flooded with 10,700 complaints from Hydro One ratepayers about over-billing or estimated bills, and what he calls "outrageously bad customer service" as it scrambled to fix technical glitches with the new system.

He says that as complaints grew, Hydro One deliberately kept problems under wraps, and deceived the electricity regulator and the ombudsman's office "about the extent and nature of the company's billing and customer service disaster."

Marin says "customers felt mistreated and abused when they tried to report billing problems to Hydro One."

In an interim report in March, the ombudsman said Hydro One deliberately deceived customers by threatening to disconnect electricity for unpaid bills, despite its policy never to do so.

Marin also warns his office and Ontario's auditor general will lose oversight of Hydro One once the Liberal government's budget bill passes, approving the privatization of up to 60 per cent of the electrical utility.

"When the technical problems sparked a flurry of erroneous bills and a flood of calls from frustrated customers, Hydro One reacted in the worst way possible, with deflection and deception," said Marin.

"It minimized the issue, misled its overseers, relied on public relations spin and put its customers last."