Wynne government in panic mode

First in a series of three

In July, Energy Minister Glenn Thibeault was pressed by Shirlee Engel of Global TV on the rising cost of electricity bills. He said, “While I’m still not using the word crisis,” said Thibeault. “I know it’s important. For one family if it’s a hundred bucks out of their own pocket that’s a crisis for them and I get that.”

In September Premier Wynne mentioned the word “hydro” at an international plowing match, and was instantly booed.

Now it appears we have a government in a panic mode trying to deal with a crisis of their own making.

The Throne Speech held promises about getting rid of the provincial portion of the HST on electricity bills. Then on September 13, 2016 a press release from Minister Thibeault confirmed the 8% reduction reducing bills $130 annually, and announced other actions such as, “Providing eligible rural ratepayers with additional relief, decreasing total electricity bills by an average of $540 a year or $45 each month”.

The press release did not detail what constitutes an “eligible” rural ratepayer; however, if it is just the 329,000 or so who are Hydro One’s “low-density” ratepayers the annual cost will be approximately $150 million. The press release went on to say: “Empowering businesses to reduce their bill by up to 34 per cent through the expansion of the Industrial Conservation Initiative” (ICI). 

Neither the Throne Speech nor the press releases say where the government is getting the money to pay for those initiatives, but removal of the 8% provincial portion of the HST will be on the backs of the taxpayers.

The electricity sector in the province is a $20-billion (before HST) business. That means $1.6 billion previously allocated to other ministries will now be unavailable, or the government will need to forgo balancing the budget or raise taxes/fees, etc. to cover off the lost tax revenue.

Minister Thibeault issued another press release in September related to “Empowering businesses to reduce their bill”.  This one had a “Customer Impact Example”:

“With more than a thousand new businesses soon eligible for ICI, cost impact across sectors and industries will vary. As an illustrative example of the impact, a plastics manufacturer with an average peak demand of 2 MW that participates in the ICI program could see its electricity price reduced from $154 per MWh to as low as $102 per MWh. This would result in energy cost savings of up to $42,000 per month.”

If you do the quick math on the above and assume each of those 1,000 plus businesses save $42,000 a month the reduction may be $500 million but once again, there is no indication where the funds will come from to cover those costs.

The above electricity bill reductions promised by the government total almost $2.2 billion and considerably more than the $1.5 billion in funds allocated to balancing the budget currently in dispute between the Ontario Auditor General and Liz Sandals, Ontario’s Treasury Board President.

So exactly how the governing party plans to pull off these bill reductions is not known.

Perhaps to create confusion amongst voters/taxpayers and inattentive media, Minister Thibeault issued another press release  September 27th announcing the “suspension” of LRP II to acquire 1,000 MW of renewable energy, principally in the form of wind, solar and biomass.  The press release declared  “This decision is expected to save up to $3.8 billion in electricity system costs relative to Ontario’s 2013 Long-Term Energy Plan (LTEP) forecast. This would save the typical residential electricity consumer an average of approximately $2.45 per month on their electricity bill, relative to previous forecasts.

It is unclear if Minister Thibeault is suggesting suspending future rate increases will somehow cover off the costs of his promises to reduce our electricity bills by $2.3 billion.

Or is it somehow related to the accounting dispute the government is engaged in with the Auditor General?

Parker Gallant

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9 thoughts on “Wynne government in panic mode”

  1. Wynne should be in “damage control mode”, better even in “damage reversal mode”.
    She should STOP ALL PROPOSED WIND PROJECTS, and CANCEL EXISTING WIND CONTRACTS, than set a LOW price for wind and solar energy. Like Spain did.
    Wynne her job is to save Ontario, not to save the wynd companies.

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  2. Reminds me of the pea under the nutshell game we use to play as kids…. again all smoke and mirrors… robbing Peter to pay Paul. Well done Parker…. thank you for breaking that down…..

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  3. I fully appreciate your enormous effort and your right to focus on whatever aspect of this egregious situation you choose. The way you apply your skills to this mess, is definitely waking people up.

    However, it always disappoints me to see no mention of the work ahead of us in Ontario to get turbines that are harming people in rural Ontario turned off and to compensate those who are willing to submit a notarized statement that they have suffered significant losses since the turbines that were placed too near their homes were turned on.
    What happens once these costs are calculated and added in?
    Please don’t forget about the people who have lost/are losing their health and whose property value has been extorted by this government. Some have had ‘for sale’ signs on their property for years and real estate agents have declared their property ‘worthless’ because the turbines were sited too close and yet these residents are still being forced to pay taxes at rates equal to, or in some cases, even higher than before the turbines were there.

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    1. Sommer, The economics of the GEA unfortunately is the easiest way to show how this wind/solar effort by the McGuinty/Wynne led government is wrong and it is the rising cost of electricity that is finally awakening the urban folks who haven’t had to deal with the health issues, the real estate effects, the effects on tourism or the damage to the natural environment. I sincerely believe the urban ratepayers are finally recognizing that adding intermittent and unreliable wind and solar to the electricity grid is what is driving the electricity price up. As you know we are working on the health issue and as well hope we can also deal with the real estate effect too. It has been my job to focus on the economics even though I fully appreciate all of the other issues that those 500 foot monsters have on people and the environment. I do hope you understand it is a multi-pronged effort.

      Liked by 3 people

  4. This may be where the Carbon Tax “benefits” flow to select (Liberal-backing) entities so there is no controlling where your money is being spent…the only thing you can be sure of, it will be YOUR money.

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  5. After years of paying off the “stranded debt” of the former Ontario Hydro we are now faced with these redicilous delivery charges. Now I wonder how the soon to be implemented “carbon taxes” will impact anything we use to keep ourselves from freezing in the dark. Will the person to leave Ontario please turn off the lights.

    Leeson

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  6. The Wynne government being in panic mode is a bit of a joke. They are only worried about the next election. This government has done nothing for the people of Ontario other than waste their tax payers dollars. We need a responsible government that is going to be cost effective not a spendthrift government that doesn’t believe it should be held accountable for is idiotic ideas.

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