By Chad Ingram
Published March 7 2017
Ontario’s Progressive Conservative party has long been callling on the Liberal government to decrease the price of electricity in the province and while the government has announced it will cut residential Hydro One bills by 25 per cent the Opposition says the method through which that reduction is being offered is a shell game that will cost Onatarians more in the long run.
After introducing an eight per cent rebate on Hydro One bills at the beginning of this year through the removal of provincial sales tax on March 2 the government announced it would make further reductions for an overall average decrease of 25 per cent on residential Hydro One bills.
“Starting this summer Ontario’s Fair Hydro Plan would provide households with this 25 per cent break” reads a release from the province. “Many small businesses and farms would also benefit from the initiative. People with low incomes and those living in eligible rural communities would receive even greater reductions to their electricity bills. As part of this plan rate increases over the next four years would be held to the rate of inflation for everyone.”
The price of electricity in Ontario has more than doubled since in the past decade from 8.7 cents per kilowatt hour during “peak” periods in late 2007 to 18 cents during peak hours today.
According to the government the two main reasons for the huge jump in electricity prices are “decades of under-investment in the electricity system by governments of all stripes” which resulted in the need for $50 billion in investment in new generation transmission and distribution infrastructure and “the decision to eliminate Ontario’s use of coal and produce clean renewable power as well as policies put in place to provide targeted support to rural and low-income customers have created additional costs.”
Ontario ended the operation of coal-powered production plants in 2014.
The province’s opposition parties say the reason for Ontario having some of the highest electricity rates in the world is due to 14 years of mismanagement by the Liberal government and the signing of numerous contracts under its feed-in tariff (FIT) program which largely overvalued the price paid to energy producers.
Most of the price reduction being offered to Ontarians is coming from a refinancing of the province’s utility debt. While that refinancing will cut repayment costs by $2.5 billion a year during the next 10 years it is expected to add $25 billion in interest costs during the next 30.
Rural Ontarians who generally make less money than their urban counterparts have been crying foul over Hydro One bills for years since high “delivery charges” can sometimes constitute up to half a household bill.
“Over the past eight years skyrocketing hydro rates have dominated the work of my constituency office” Haliburton-Kawartha Lakes-Brock MPP Laurie Scott said in a relaese last week. “ The energy poverty caused by this government is out of control with seniors and working families in my riding being forced to make the impossible choice between heating their homes and putting food on the table.”
“Instead of providing real relief to rural Ontarians the Wynne government’s electricity plan will only burden future generations with the cost of their terrible policies” the release reads. “Ontarians will be on the hook for an extra $25 billion in interest payments for the cost of electricity over 30 years all in a ploy to save them from electoral defeat.”
Ontarians head to the polls in 2018.