Conservatives claim secret Liberal report predicts monthly bills in Ontario will hit $215 in 10 years
Conservatives claim secret Liberal report predicts monthly bill to hit $215 in a decade
The short-term gain of a 25 per cent hydro rate cut this summer could lead to long-term pain as a leaked cabinet document forecasts prices jumping again in five years.
In the briefing obtained by the Progressive Conservatives, rates will start rising 6.5 per cent a year in 2022 and top out at 10.5 per cent in 2028, when average monthly bills hit $215.
That would be up from $123 this year once the rate cut — the subject of long-awaited legislation unveiled Thursday by Energy Minister Glenn Thibeault — takes full effect. There will be a further 17 per cent cut — in addition to the 8 per cent taken off bills in January when the provincial portion of the HST was waived.
The leaked papers overshadowed Thibeault’s efforts to tout the price break, which will be followed with four years of hydro rate increases at two per cent, roughly the rate of inflation.
Thibeault charged the Conservatives used an “outdated” document to distract from the fact they are the only major party without a plan for dealing with skyrocketing hydro rates with a year to go until next June’s provincial election.
“It’s not a coincidence,” he told reporters, denying any plans for an eventual 10.5 per cent rate hike and promising the government’s new long-term energy plan, due in a few months, will have better numbers.
Opposition parties said the Liberal plan doesn’t deal with the underlying problems that made hydro expensive and simply borrows money to spread the costs over a longer period with $25 billion in interest charges over 30 years.
“The price of electricity is going to skyrocket after the next election,” warned MPP Todd Smith.
“The government isn’t being honest with the people of Ontario when it comes to the price of electricity.”
The documents show average monthly bills peaking at $231 in the year 2047, before falling back to $210 the following year, once the 30 years of interest payments are over.
Conservative sources say they obtained the papers stamped “confidential cabinet document” from a whistleblower after Thibeault’s rate cut plan was presented to cabinet ministers at a meeting in March.
There is no date on the document that the energy minister alternately dismissed as “inaccurate” or possibly one of many prepared with different options in mind.
New Democrats, who proposed a scheme to cut hydro rates 17 to 30 per cent if elected, also called the government plan an election ploy with Liberals lagging in the polls.
Thibeault admitted the Liberal plan will start repaying borrowed money in the mid- or late 2020s and will show up separately on hydro bills as the “Clean Energy Adjustment.”
He compared the borrowing plan, which spreads costs of upgrading the electricity system by closing coal-fired plans and using more clean sources of power over a longer period, with a homeowner extending a mortgage.
Aside from setting up an entity to do the borrowing, the legislation expands rate subsidies for remote rural residents and low-income families and shifts their costs to the broader tax base, instead of leaving them for ratepayers to cover as is the case now.
Smith, his party’s energy critic, said the Clean Energy Adjustment is akin to the recently axed debt retirement charge from the old Ontario Hydro, but “on steroids” and in place until the year 2047, according to the leaked documents.
“The debt retirement charge was $4 or $5 on the average residential bill. This one is going to reach $21 by the year 2028. … That’s a huge hit,” he added.