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Hydro Bills Set to Skyrocket

(Queen's Park Report - January 27, 2010) The advent of a New Year is typically a time when people start to rein in spending and adhere to a strict budget after an often expensive Christmas season.  This year that budget will grow to be even tighter due to Dalton McGuinty’s hydro scheme that will set us on a course for skyrocketing energy prices.

 

The imminent double whammy this year comes in the form of time-of-use pricing and the new Harmonized Sales Tax.  Put together, these two McGuinty government policies are just the beginning of a fiscal avalanche that will see us all paying more to get less from government in 2010 and beyond.

Time-of-use pricing is just as it sounds.  It allows hydro companies to charge you based on the time of day you use electricity, which is calculated using those new Smart Meters that have probably already been installed at your home.  Many communities already have this system in place.

To get a better picture of how this will affect us all we need to do is take a look at the price schedule.  Between November 1st and April 20th from 9 p.m. to 7 a.m, weekdays and weekends, it cost 4.4 cents per kWh to use electricity; from 11 a.m. to 5 p.m. on weekdays it cost 8 cents; and from 7 to 11 a.m. and 5 to 9 p.m. weekdays it was 9.3 cents.  Averaged out over the full 168 hours in a week and you are paying 6.224 cents per kWh – that is a full 7.3 percent above the current rate of 5.8 cents per hour for the first 1,000 kWh used by the average household.

Time-of-use pricing is hailed in some corners as an energy efficiency tool, and in some ways that’s true.  The problem is, if you’re like me, I don’t cook my meals, watch the TV, use my computer or light my house during the middle of the night.  Nor do I keep my refrigerator on purely during the wee hours of the morning.  Like my freezer, it runs all the time.  These electronics and appliances are among those responsible for about 20% of a typical monthly hydro bill.

The way this new pricing system is being implemented is really just a hydro money grab cloaked in energy efficiency.  Most of us may be able to adjust, but seniors living on fixed incomes who are at home during the day will get hit the hardest.   In fact it was complaints from local seniors that promoted me to write this column.

Now if a 7.3 percent increase isn’t enough to grit your teeth until the bill arrives, Mr. McGuinty is also throwing an additional eight percent at you when the Harmonized Sales Tax comes into effect on July 1st.  This amounts to more than a 15 percent increase in our hydro bills.

Regrettably, there’s more bad news.  Mr. McGuinty’s Green Energy Act allows producers of renewable energy to be paid rates as high as 80 cents per kWh.  Compare that to current market prices of 3.3 cents per kWh, or even the 4.5 cents the government-owned Ontario Power Generation gets for most if its electricity.  Expensive, isn’t it?

Don’t get me wrong, I’m all for renewable energy, but lets face it, its production should come with some connection to the current economic situation.  Even worse, Mr. McGuinty is binding successive governments to these rotten polices by guaranteeing these horrible prices with 20-year contracts.

So who gets hurt by these energy policies?  Well you and me of course.  And all this from the guy who swore in 2003 he’d freeze electricity rates.

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