Understanding Your Hydro Bill
(September 30, 2013) In early September, Konrad Yakabuski of the Globe and Mail offered a good explanation of Ontario hydro bills. As the escalating cost of hydro is one of the most common concerns that I hear about from families throughout the riding and province I wanted to share some of the points he touched on.
As Yakabuski points out, understanding our bills is not always easy. There are so many different charges that have nothing to do with energy consumption that it is easy to get lost.
No longer are hydro bills as simple as multiplying our total usage by the electricity price. That, of course, would be too easy.
On each and every bill we are also charged for a range of other costs including the delivery charge, the regulatory charge and the debt retirement charge that together often account for more of the total cost than the actual market value of the energy we consume.
So what is it that we are paying for?
The truth is much of what is collected goes directly back into provincial coffers. Kathleen Wynne and the Liberal government are the only ones with access to how this money is spent and they have refused to open the books to show where this money is going.
Two winters ago I toured the province to create awareness on this issue. A top point of contention continues to be the debt retirement charge. Provincial books show that this liability was paid off in 2012; yet, Ontario families continue to be charged over $1 billion a year with no explanation. In fact, the Liberals have extended this charge until at least 2018.
Another fee that Ontarians pay, although not directly visible on residential hydro bills, is the global adjustment. This one is interesting. This charge is worked into the cost of electricity and pays the difference between regulated and contract prices for electricity paid to certain generators and the market prices they would have received had they not be subject to regulation or contract.
In other words, hydro rates in Ontario have grown from 4.3 cents in 2003 to as high as 12.4 cents in 2013 as a result of this government's green energy agenda that guarantees 20 year contracts to mostly foreign owned renewable energy producers at above market prices. We also pay for the cost of two cancelled gas plants that the government moved to shore up Liberal seats in the last provincial election.
Look, we all support renewable energy; but, when we have to pay other jurisdictions to take the power and also subsidize it to the point that it's bankrupting our province it is not what is best for the environment or the economy. Not to mention that decisions over renewable energy projects have been removed from municipalities and have been given to provincial bureaucrats that likely would have to look at a map to see where our riding is.
The Auditor General estimates that in between 2005-2011 Ontario lost $1.8 billion paying other jurisdictions to take our surplus power. The Independent Electricity System Operator indicates that this computes to a loss, on average, of $24,000 per operating hour of renewable energy.
As I write this column Ontario's power demand is 15,847 MW. Of that, only 135 MW is coming from wind. And, while increases to hydro bills are a direct result of this tiny percentage of supply, we actually must pay for the total capacity or 1,725 MW of wind energy currently on the grid no matter if we use the energy or not.
This can't continue.
As we face an $11.7 billion provincial deficit and $273 billion dollar debt we need an energy policy that will stimulate our economy and create jobs. The government's irrational energy policy reveals their complete contempt for Ontario families and must change.