This hy­dro bill re­lief will come as a shock

The Hamilton Spectator - - OPINION - John Roe

Wel­come one and all to the On­tario gov­ern­ment’s in­cred­i­ble, stu­pen­dous hy­dro-cuts em­po­rium where you can buy cheaper elec­tric­ity to­day — then pay big­time for it later.

If this makes the Lib­er­als’ mis­named Fair Hy­dro Plan sound like a slick scheme con­cocted to get them re-elected, that’s be­cause to a large de­gree it is.

Yes, we know On­tar­i­ans were beg­ging for re­lief from con­stantly soar­ing hy­dro bills. We also know many con­sumers are cheer­ing Premier Kath­leen Wynne’s plan to slash hy­dro rates by 25 per cent this year and then limit in­creases to the in­fla­tion rate for the next four years.

But as the province’s fi­nan­cial watch­dog re­ported last week, the cost of in­su­lat­ing On­tar­i­ans from soar­ing en­ergy bills will even­tu­ally shock them to the tips of their toes.

To be sure, the Lib­eral plan will save con­sumers $24 bil­lion over the next four years. That’s a tidy sum and it’s no co­in­ci­dence the sav­ings are per­fectly timed to in­spire warm and fuzzy feel­ings for the Lib­er­als be­fore the June 2018 elec­tion.

But as the Fi­nan­cial Ac­count­abil­ity Of­fice just re­ported, it will cost the province a jaw-drop­ping $45 bil­lion over the next 29 years to make those sav­ings pos­si­ble. In ad­di­tion, if in­ter­est rates rise or the province starts run­ning deficits again, the even­tual cost of the plan could bal­loon to $93 bil­lion. The in­escapable rea­son for this daunt­ing bill is that the province must bor­row heav­ily to pay for the dis­counted hy­dro rates.

That money must be re­paid. And in or­der to lower hy­dro bills in the short term, the gov­ern­ment will need to in­crease them in sub­se­quent years to cover the debt that fi­nances the plan. It’s all a bit like us­ing a carv­ing knife to ex­tract a splin­ter. The op­er­a­tion may suc­ceed, but the bleed­ing will be con­sid­er­able.

So, while you can, en­joy see­ing av­er­age monthly hy­dro bills drop from $163 to $123 start­ing this sum­mer. But brace your­self for hy­dro rates to in­crease by 6.8 per cent a year from 2021 to 2027. Be ready for the av­er­age monthly bill to rise to $213 by 2028.

And get set for av­er­age con­sumers to spend thou­sands of dol­lars in ex­tra elec­tric­ity costs be­tween 2028 and 2045. All be­cause of the Fair Hy­dro Plan.

To the ex­tent that the public is get­ting the lower bills it asked for, peo­ple shouldn’t gripe too loudly. Vot­ers have ac­cepted this. But the bot­tom line of the Fair Hy­dro Plan is fright­en­ing.

It is a re­minder, too, of how badly this gov­ern­ment has mis­man­aged the elec­tric­ity file — think of their sub­si­dies for wind and so­lar en­ergy we don’t need. Other gov­ern­ments of dif­fer­ent po­lit­i­cal stripes have made a mess of it be­fore.

But the Wynne gov­ern­ment has noth­ing to be proud of in how they’ve han­dled On­tario’s elec­tric­ity sys­tem.

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