The shell game recently announced to the taxpayers of Ontario by Premier Wynne and her trained seals is contained in these statements: “Bringing down rates by 25% and fixing the system’s structure — that’s the approach that I believe in. I think it’s better for Ontario. And I know it’s fairer on families.”
The media isn’t buying it. They clearly describe how the rate reduction will happen, and the shifting of dollars to accomplish the claim of “fixing the system’s structure” has been widely discredited. Wynne’s gambit is reported as a “shell game” or as “robbing Peter to pay Paul.” Perhaps the Premier should have gone about her plan without the fanfare associated with a news conference and press release and she may have avoided some of the negative attention!
Avoiding negative feedback was something Bob Chiarelli managed as Energy Minister when he shifted almost $500 million in electricity costs to the delivery line of our hydro bills, almost unnoticed. All he had to do was make a simple change to regulation 275/04.
But there is no doubt that move, effective July 1, 2013, had an impact on the delivery line and was a concern mentioned by Premier Wynne in her speech on January 19, 2017, as reported by the CBC when she said, “The delivery charge is something that comes up repeatedly. I am hearing it consistently as I talk to people across the province.”
“Note: On July 1, 2013, subsection (2) is amended by adding “and” at the end of clause (c) and by adding the following clause: (See: O. Reg. 405/12, ss. 1, 5) all charges related to losses incurred in the distribution of electricity, except for such amounts that are already included in regulatory charges under subsection 4 (2).”*
That simple regulation change effectively increased the delivery line costs by $500 million ** while reducing the electricity costs by the same amount. One should suspect Minister Chiarelli, at that time, recognized rates had increased 28% from May 1, 2009 to May 1, 2013 and would increase by another 40% over the next five years. In the latter case when he released his version of the LTEP in December 2013 the forecast for rate increases had climbed to 42%. Presumably by shifting the costs of “line losses” he felt he would be able to add more intermittent and unreliable wind and solar to the grid.
On June 27, 2013 the Ontario Energy Board issued their instructions to the local distribution companies telling them to comply with the regulatory change. That letter said: “Changes to the Bill Presentation Regulation that come into force on July 1, 2013 require that costs associated with losses be shown differently for billing purposes than they are today, as described in section 2 below.”*
The shift of moving “line losses” from the electricity line to the delivery line immediately increased distribution costs by 15%** so it should come as no surprise to the Premier that “The delivery charge is something that comes up repeatedly”.
Dalton McGuinty started this shell game when he was the premier; now Premier Wynne and her appointees to the Energy Portfolio simply follow along.
The Ontario Liberal government clearly believes we will never find the pea!
* My emphasis.
** Based on average line losses of 3.7% (4.628 terawatts) as reported by the OEB in the 2015 Yearbook of Distributors.