Wynne government electricity bill relief comes with a price tag

Not a chance ...
Not a chance …

October 13, 2016

Ontario Minister of Energy Glenn Thibeault is promising Ontario’s electricity customers some relief, according to several press releases springing from the Throne Speech in early September.

While the costs of the relief including the 8% Provincial Sales Tax abatement and the “low-density” monthly reduction is worrying, in that funding for it has not been disclosed, a bigger hit may be coming. The Minister said “more than a thousand new businesses soon eligible for ICI, in the September 15th press release.

ICI is the “Industrial Conservation Initiative” and refers to Class A customers (companies with peak demand is 5 megawatts or higher) whose electricity rates are subsidized by the Class B customers (demand over 50 kilowatts but less than 5 megawatts) if they reduce consumption during a few “peak” hours over the course of a year.

In Germany, the equivalent of Ontario’s Class B ratepayers pay 98% more for a kilowatt (kWh) of power than a German industrial consumer, according to statistics from Eurostat. Looking at the information for Ontario on the IESO site it appears that with the Minister’s announcement Ontario’s ratepayers may soon be put in the same position.  Currently it appears a kWh of power (commodity only) costs an average Ontario ratepayer 58% more than a Class A industrial consumer. The foregoing calculation is based on the GA (Global Adjustment) information from IESO plus the average HOEP (hourly Ontario energy price) for the 2016 January/August period.

The Minister’s announcement of an expanded ICI program reducing peak demand from 3 MW to

1 MW and adding “more than a thousand new businesses” will push the commodity cost down for those 1,000 businesses reportedly by 34%, but the contracted value of the generated power will remain.

Someone will have to pay for the difference.

Unless Minister Thibeault has suddenly found a cache of money that Finance Minister Sousa is willing to part with, it will be left to Class B ratepayers to pick up the tab.

The Energy Minister’s press release suggested a “Customer Impact Example” which was a plastic manufacturer whom he suggests could save $42K per month or $500,000 per annum.  If all 1,000 of those businesses are successful in doing that, the implication is that the cost of the ICI shift may total $500 million.

Quick math indicates the 4.5 million “average” residential ratepayers will be looking at an increase in their bills of about $10 a month, or $120 on an annual basis. Coincidentally, that $10 a month is almost equal to the $11 a month those same ratepayers  will supposedly save due to the removal of the Provincial Sales Tax portion (8%) of the HST.

What it is: another crushing blow to all of the residential ratepayers of the province.

The Energy Minister’s concept of a “benefit to all consumers in Ontario” looks to be simply a shuffling of money from one ratepayer’s pocket to another.

Parker Gallant

 

Advertisements

7 thoughts on “Wynne government electricity bill relief comes with a price tag”

  1. “GREEN” Fascism just doesn’t end…
    “Pre-payment meters were given provisional approval before the liberal “Greed” Energy and Employment Act had raised electricity prices. Hydro One had not been sold, nor had the “smart meter” electricity scandal cost electricity consumers over a billion dollars. On the basis of no comments or requests from the public or industry back then, the federal government has assumed “implied consent,” which in their way of thinking gives approval to move full speed ahead.

    To picture a pre-payment electricity meter, just think of a parking meter that you load with money in order to park a vehicle. These are popular in third-world countries, particularly where poor people have no access to credit. They enable the power utilities to deny access to a basic necessity without actually having to pull the plug if customers have trouble with bills. It forces the poor household to self-disconnect.”
    http://cherylgallant.com/2016/10/11/report-from-parliament-oct16/

    Like

  2. The funding for the removal of the provincial portion of the HST comes from axing the 10% Clean Energy Benefit. They both went on the hydro bill about the same time. It amounted to taking money out of one pocket and putting it into the other.

    Like

  3. You gotta keep a close eye on these people…. thank dog that Parker can sift through all this slight of hand smoke and mirrors liberal government doings. …
    so self entitled. … so arrogant. … so reckless…..

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s