And, it’s going up. And up.
December 21, 2016
A neighbour and good friend who farms in Prince Edward County kindly provided a copy of a recent issue of the Farmers Forum newspaper and pointed out an excellent article written by Angela Dorie, an agricultural writer and Jersey cattle farmer. The article highlighted the “water rental fee”* hidden in the electricity line on our bills to pay for the water used to generate electricity. Dorie only realized the fee was there when journalist Paul Bliss of CTV brought it to light during a National News broadcast.
I recently wrote article on the fuel tax, suggesting a reduction of it was a way to offer relief to climbing electricity prices, but I didn’t examine how much the “water fuel tax” has risen over the past several years, or how much it has contributed to the province’s revenue.
As it turned out, in 2015 the water fuel tax was $345 million for the generation of 30.4 terawatts (TWh) and represented a cost to ratepayers that amounted to $11.35 cents per megawatt (MWh) or 1.14 cents per kilowatt hour of electricity generated. While the current government didn’t institute the tax, they have significantly raised it over the years. Back in 2002 the tax was $116 million for the 34.3 TWh generated or $3.38/MWh and 0.34 cents/kWh so it is now 3.3 times what it was the year before the Liberals gained power.
Water fuel tax: $2.7 billion and climbing
According to the Ministry of Finance the “water rental charge rate is fixed at 9.5% of a station’s gross revenue from annual generation.” Reviewing OPG’s financial statements for the past 10 years (2006 to 2015) one can see the fuel tax totaled $2.735 billion. In 2015 the fuel tax cost the average ratepayer household approximately $70.
It appears that when Dalton McGuinty was premier, he not only burdened us with the “health tax” he also raised electricity bills via a stealth tax which many of us have only just become aware of. Premier Wynne is now suggesting transparency may come to our electricity bills by endorsing the appearance on our bills of the Global Adjustment. In the current year the GA appears headed to a record $12 billion or about 8.8 cents per kWh based on anticipated consumption of 137 TWh.
One has to wonder how many other taxes and fees are hidden within our electricity bills that will come to light if we actually get an explanation of the GA that is truthful and fully transparent!
Excerpt from the CTV news story:
For decades, the provincial government has been charging for every litre of water flowing through its own power turbines at dams to produce electricity. The tax includes water surging through Niagara Falls.
“It’s effectively a water rental,” independent energy advisor Tom Adams told CTV’s Paul Bliss.
The government charges Ontario Power Generation for the water it uses. Those expenses are passed on from the company to taxpayers.