PC critic calls Ontario hydro prices ‘debt retirement charge on steroids’
Posted May 11, 2017 3:13 pm.
Last Updated May 12, 2017 9:10 am.
This article is more than 5 years old.
A Progressive Conservative critic says the “Clean Energy Adjustment” that’s eventually to be added to hydro bills is nothing more than a revamped debt retirement charge.
New legislation introduced by the Liberal government will mean lower hydro bills for Ontarians for the next 10 years, followed by higher costs for the next 20 after that.
PC Todd Smith says it still boils down to a new charge being on bills, and he calls it a “debt retirement charge on steroids.”
Energy Minister Glenn Thibeault says the goal is to better spread out costs over a longer term, much like a mortgage on a house.
The new legislation,called the Fair Hydro Act, was introduced by Kathleen Wynne’s government on Thursday. Queen’s Park promised to lower electricity bills by 25 per cent on average — but it came out on the same day a leaked internal cabinet document has revealed Ontarians’ bills will rise again in four years.
Starting in 2022, the average bill is projected to go up 6.5 per cent every year. In 2028, it will jump 10.5 per cent, bringing the average amount to about $215 a month compared to this year’s average of $123.
“For any confidential document, I can’t verify it, but what I can tell you is the number is inaccurate,” Thibeault said.
“We are working hard right now to continue to pull costs out of the system.”
But Smith, the energy critic, said the minister was briefed on the leaked document.
“It’s a real document,” he said. “The minister … when asked about the price of electricity in 2024, said he didn’t have a crystal ball. But it’s right there in black and white in that document.
“The average price of electricity — is it going to go down next year compared to this year? Yes. But we’re going to see those rates soar to heights that we’ve never seen in Ontario, as a result of the plan that the government has brought forward.”
Electricity bills in the province have roughly doubled in the last decade, and have sparked increasing anger among Ontarians, leading to plummeting approval ratings for Premier Kathleen Wynne ahead of the 2018 election.
Ten weeks after announcing its plan to lower hydro bills, the Liberal government has introduced its legislation to lower time-of-use rates, take the cost of low-income and rural support programs off bills, and introduce new social programs.
Time-of-use rates are being lowered by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers.
For the next 10 years, a new entity overseen by Ontario Power Generation will pay that difference and take on debt to do so.
Then, the cost of paying back that debt — which the government says will be up to $28 billion — will go back onto ratepayers’ bills for the next 20 years as a “Clean Energy Adjustment.”
“Like the mortgage on your house, this regime will cost more as we refinance over a longer period of time, but this is a more equitable and fair approach when we consider the lifespan of the clean energy investments, and generating stations across our province,” said Thibeault.
NDP critic Peter Tabuns called it a “get-through-the-election” next June plan.
“We’re going to take on a huge debt so Kathleen Wynne can look good on the hustings in the next few months and for decades we’re going to pay for it,” he said.