‘Selling Hydro One Isn’t Going to Help’

By Penny Coles

Niagara Advance (May 21, 2015) – There’s little good news in the future for Ontario hydro customers, says Niagara-on-the-Lake Hydro president Tim Curtis.

Electricity commodity charges are increasing this month, and will again in November, he said.

But the biggest hit will be in January, when the Ontario Clean Energy Benefit, which gives all residential customers and most small businesses a 10% discount, will be removed.

This discount was originally provided in 2010 by a government that wanted to reduce electricity from coal, and encourage renewables such as wind and solar power, says Curtis, but coal is cheap and wind and solar power are “really expensive,” and not reliable.

Residential customers will get some relief ($5.60 a month) with the removal of the Debt Reduction Charge, he said, but their bills are still going up 14%, or an average $200 a year, because of the increase in the commodity cost.

Small businesses will not get this relief, will still pay the Debt Reduction Charge, and are looking at a 19% increase or an average $700 a year, he said. “This will be a huge price jump for these businesses,” he said.

By January, residential customers will have seen their hydro bill increase by 48% since 2006 – their cost of electricity up 102%, balanced by the decision of the government to discontinue the debt reduction charge.

Small business customers will be looking at an increase of 89% over the last 10 years, says Curtis, and an overall increase of 47% – without the reduction in the debt charge.

But the real issue, he says, is what is driving up commodity rates, what the government is doing to manage those rates and how they’re going to get them down again, says Curtis.

Independent experts have estimated that it cost Ontario as much as $1 billion last year to sell excess power south of the border, he says, and the cost of the wind and solar power contracts was as much as $1.5 billion above the traditional sources of electricity.

The government has also been using hydro as a way to promote social programs, create jobs and save the environment, which may all be good causes, but have driven up the cost of the commodity, says Curtis.

“Each of these in isolation may seem like a nice thing to do, but added up have become a real burden to the consumer.”

Ten years ago, the government predicted an increase in the use of electricity, but instead it’s gone down – partly because of the loss of industry that relied heavily on electricity, and partly because of increased conservation efforts in residential use, which is a small amount for each home but added up represents a significant amount across the province, says Curtis.

But the province has contracted for expensive solar and wind energy, and the only way to reduce the supply is to cut back on the less expensive hydro electricity, he said, resulting in the discount prices to the U.S.

“Costs are increasing everywhere you look. And selling Hydro One or merging some of the distribution isn’t going to help.”

It’s not unusual to have NOTL customers come into their local utility angry about the increases to their hydro bill, says Curtis – although NOTL Hydro can’t control hydro rates, “we’re the ones who collect it,” he said.

One of the advantages to being owned by the municipality is that people can come in, and that offers the opportunity to talk to them and explain why their bills are increasing, he said.

“What we hear is ‘don’t sell the utility,’” he added, “because our customers have someone they know they can talk to, and because we can help keep tax rates down.”

Only the province can reduce the price of the commodity, he said. “It has a responsibility to keep consist low, and it’s abdicated that responsibility,” said Curtis.

“Real attention must be focused on getting the cost of power down.”


 

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