Rising Energy Prices Creates Poverty and Politicians are Responsible

The good old days

Those who receive media output from the OEB (Ontario Energy Board) will have recently received an e-mail notice titled “End of Winter Disconnection Ban”! It informs the reader how to avoid the disconnect by outlining the various programmes that now exist to obtain taxpayer dollars to cover the costs as well as what your local distributor can or cannot do!

We should all assume this happening is merely the “chicken coming home to roost” due to how our energy costs have been climbing steadily due to Federal, Provincial and Municipal governments having gone overboard in an effort to achieve “net-zero” to hinder or stop, what was once called “global warming” but has morphed into “climate change”!

The not-so-subtle warning from the OEB served as an enticement to go back in time to see how things once were It led to IESO’s (Independent Electricity System Operator) website where they have listed TOU (time of use) rates from 2006 through to the most recent price change effective November 1, 2023! Here are the screenshots of the November 1, 2023, and 2006 price ranges. The middle screenshot from May 1, 2018, was when the Ford led Ontario Conservative Party took over from the McGuinty/Wynne Ontario Liberal Party and in the runup to that election they promised to reduce electricity prices!

To put context on where we were back in 2006, IESO in their annual release of the 2006 Generation and Consumption Figures had the following to say: 

“Improved supply conditions and lower total demand in 2006 contributed to the lowest annual average weighted price since the market opened in 2002. The average price for 2006 was 4.87 cents per kilowatt hour, down 30 per cent from the previous year.“ IESO went on to note: “Ontario set a new all-time record for electricity demand of 27,005 MW on August 1, 2006.  However, despite this record peak, total annual demand for electricity declined to 151 TWh, compared to 157 TWh in 2005.“  

It is worth noting that daily peak demand has maintained the record since 2006 and annual demand has not reached 151 TWh since then.  Perhaps the climb in the costs of electricity had something to do with that as Ontario’s population back in 2006 was lower as were the number of households which have increased from around 4.6 million to almost 5 million in 2020. We should suspect both households and the population of Ontario are undoubtedly higher today.

Time of Use (TOU) Prices Ahead of Inflation

Should one do the math on inflation rates from 2006 to 2023 we discover they increased in Ontario by 44.1% and 16.9% from 2018 which turns out to be well below the increase in TOU rates for both the McGuinty/Wynne Liberals and the Ford Conservative led governments!

Since 2006 to 2023 Off-peak rates are up by 159%, Mid-peak by 72% and On-peak by 88% so all are well above the 44.1% inflation increase we experienced in those 17 years!

From 2018 to 2023 Off-peak rates are up by 33.8%, Mid-peak by 29.8% and On-peak by 45.4% which again is well above the 16.9% overall increase in inflation rates in the past 5 years!

Should one examine which of the three TOU rates jumped the most since 2006 it is obvious the biggest increase by far was in the “off-peak” rates which co-incidentally is responsible for 60/70% of household demand. Off-peak rates apply over weekends including holidays and also apply from 7 PM in the evening to 7AM in the morning during workdays and as noted during the 2006 to 2023 timeframe those rates increased the most and usually represent over 60% of usage during a normal month.  

Conclusion

It is obvious from the above information with the actual facts coming from the OEB and IESO that Ontario’s electricity rates have outstripped inflation by a significant margin since 2006 due to both the Liberal and Conservative led Provincial governments.  Both the Liberals and the Conservative governing parties have chosen to allow those rates to continue climbing adding to inflation while layering on rebates for taxpayers to absorb (Ontario’s recent budget allocates $7.3 billion) and adding other programs to help those suffering from “energy poverty”! 

While the Ford led government cancelled the GEGEA (Green Energy and Green Economy Act) passed by the McGuinty Government in 2009, the cancellation did absolutely nothing to reduce the cost of electricity to ratepayers who are also taxpayers.  Premier Ford and his Minister of Energy continue to push the net-zero concept, presumably in support of the Federal led government, which will continue to increase the costs of what is a basic necessity.  With IESO seeking increased generation and storage capacity coupled with nuclear plant refurbishments to meet those “net-zero” targets and achieve full “electrification” it is hard to visualize how they will be able to slow the increasing costs of the electricity sector down.

PS: It appears Britain may intend to head down the same path as Ontario as a recent article noted:How Canada’s surge pricing experiment backfired – and why Britain is next (archive.ph)