Fooling people with their own money

Newfoundlanders might take momentary comfort in the revelation that they are not the only group of Canadian citizenry being taken for chumps by their own politicians.

The Ontario government has adopted manipulation and machinations regarding hydro rates similar to those employed in Newfoundland. Is it mere coincidence Liberals rule in both provinces?

We wait for political scientists to weigh in.

Premier Kathleen Wynne intends to cut Ontarians’ hydro rates by 25 per cent.

According to a Canadian Press story, Ontario Auditor General Bonnie Lysyk says “the government has not accurately reflected the true cost of its borrowing plan to cut hydro rates by 25 per cent.”

“Under its Fair Hydro Plan, the government will borrow money over the long term to cut rates immediately,” CP reported. “Lysyk said the government has not included the cost of compensating power generators or interest on the money borrowed for the plan.”

“Fair Hydro Plan” is a close cousin of Rate Mitigation.

A government not letting the public know about the cost of its borrowing? It sounds like what happened with a certain $6.2-billion project that ended up — for now — costing $12.7 billion.

Lower electricity bills are an easy enticement. Ontario has a provincial election scheduled for June 7. Perhaps it’s related to the government’s money manoeuvres.

Speaking of manoeuvres, among the most monumental in recent memory is the “Labrador energy warehouse” morphing into “rate mitigation.”

When Muskrat Falls’ overpriced juice begins to flow in 2020-21, ratepayers’ electricity bills will be set to double.

Except that they won’t, Premier Dwight Ball has assured chumps all over the province.

Rather than rising 100 per cent, rates will rise by only 50-60 per cent via the creative manoeuvre of rate mitigation, a euphemism that essentially means using taxpayers’ money or other government revenue to subsidize hydro rates.

But rate mitigation isn’t the only machination on the move regarding Muskrat Falls bills. Ontario Liberals must watch with awe and envy as Newfoundland and Labrador Hydro outlines its plan to trick ratepayers with their own money.

The Public Utilities Board (PUB) is currently reviewing an application by Newfoundland and Labrador Hydro to increase hydro rates by 7.5 per cent on July 1 this year and by an additional 9.4 per cent on Jan. 1 next year.

A portion of the requested increases would enable Hydro to bank money in a “deferral account,” because ratepayers would be billed for more than the cost of the imported power coming across the recently new Maritime Link.

Then, a few years hence when the shock of Muskrat Falls’ true cost is about to smack rate-paying chumps from Pouch Cove to Port aux Basques, Hydro will dip into the “deferral account” and use ratepayers’ previously paid fees to lessen their bills.

Economists surely have a word or phrase to describe a situation in which a company — or Crown corporation — shifts assets around like a shell game and then fools people with their own money. If so, they’re staying silent about it.

“Manipulation” will do for now. Two or three years from now, thousands of chumps will look at their first rate-mitigation and deferral-account bills for Muskrat Falls power and naively exclaim, “Hey, this isn’t nearly as bad as they said it would be.”

As hard as it might be for Newfoundlanders to imagine these days, in some places politicians actually defend rather than victimize their citizens.

In South Carolina, a utility company recently abandoned a megaproject to build two nuclear reactors, at a loss of $10 billion. To cover its error, the company wants ratepayers to fork over 18 per cent more on their power bills. The state House has said no. The state’s governor says he will veto any bill that allows any increase in power bills.

It’s too bad politicians can’t be traded like hockey players.