Study after study points to Wynne’s mismanagement of electrical system

ELECTRICITY COSTS IN ONTARIO have outstripped inflation, the marginal growth in the economy, increases in income and our ability to pay.

That’s not really news to most of us, as we see firsthand how bills have skyrocketed – first bimonthly and now monthly as the Wynne government attempts to camouflage its mismanagement by changing the billing cycle, at a not-inconsequential cost to utilities such as Waterloo North Hydro. Report after report outlines the depth of the province’s failures, and last week’s study from the Fraser Institute is no exception.

Ontario electricity prices increased twice as fast as the national average over the past decade, and the average Toronto resident now pays $60 more per month than the average Canadian for electricity, the highest rates in the country, the report finds. Electricity prices in Ontario increased 2.5 times faster than Ontario income levels between 2008 and 2015 (the latest year of income data). Prices rose a staggering 71 per cent between 2008 and 2016, more than double the national average increase of 34 per cent over the same time.

For example, residents in Toronto pay, on average, $201 per month (including taxes) – an increase of $77.09 over the past six years. Ottawa residents pay $183 per month. Compare that to the monthly electricity bills in Montreal ($83), Calgary and Edmonton ($109), and Vancouver ($114) and it’s hard not to argue the government has failed Ontarians (on this front and many others).

A homeowner in Manitoba or Quebec has a hydro bill that is literally half the price an Ontario family would pay for the same amount of power.

That’s the crux of much of the criticism, but not the only issue at play. The public isn’t convinced we’re getting good value in the wake of the government’s policy decisions.

From rural residents fighting against wind farms to the overly-generous rates paid to providers of renewable power, the Green Energy Act has been a public relations nightmare from the start. From the get-go its projects were associated with rising prices, though initially the impact was minimal. That’s changing as more projects come online, making green energy even more problematic in some quarters for a government intent on following that path.

Then there’s the nuclear issue. Supporters point to the steady supply of emission-free power. Critics point out the inherent risks, especially in the waste, and the massive cost overruns.

The government wants to press ahead with refurbishing plans to keep some of the current generators going, but has backed away somewhat from a building program.

Even those who praised the government’s decision to phase out coal take issue with its energy plan going forward.

The latest study finds that Ontario’s high prices are directly tied to the provincial government’s phase-out of coal energy, poorly structured longterm renewable energy generation contracts and other policy choices.

What’s more, to address the high costs faced by residents, Queen’s Park has recently announced a plan to use debt-financing to artificially lower current electricity prices. However, this plan will result in new charges being added to future bills – one way or another, the province will dig deeper into your pockets while providing little in return.

“The Ontario government and its energy policy decisions share a lot of blame for the current crisis in electricity prices,” argues Kenneth Green, Fraser Institute senior director of energy and natural resource studies and coauthor of the study. “Ontario residents need real policy reform to help make electricity affordable again, not just short-sighted shell games that borrow from future ratepayers to subsidize current bills.”

Between 2006 and 2014, Ontarians overpaid for electricity by $37 billion, and will be overcharged by another $133 billion by 2032. Rather than pay me now or pay me later, Ontarians are subject to an endless cash grab of pay me now and pay me later

While prices reflect increased costs for dealing with an aging system, much of the overpayment can be traced to poor policies. The Liberals routinely ignored expert advice – and even common sense – in pursuit of ill-advised policies, political patronage and vote-buying, decisions that went well past the billion dollars flushed away on the gas plant fiasco.

Despite all the extra money we’ve been dumping into it, the electrical system continues to worsen, with a high risk of failure, we’re warned.

Then there’s the Green Energy Act, which began as a minor cost item in the name of promoting cleaner, renewable technologies to replace coal and other fossil fuels. With exorbitant rate guarantees to providers, projects such as solar- and wind-powered generators came online in a sudden rush, even as demand dropped. Ontario was selling surplus electricity at discount rates, and even paying others to take it, passing the massive losses on to consumers who faced escalating bills even as they cut back and attempted to make use of time-of-day pricing.

The installation of smart meters in conjunction with time-of-use pricing was supposed to help us lower our electricity bills. That’s not been the case. In most instances, the savings have been minor if they’ve come at all.

The reason? The actual electricity we use is just part of the cost, as you can plainly see on a bill that itemizes such items as transmission and debtretirement costs. And then there’s the global adjustment fee. Once a minor item that reflected the cost of bringing new generating capacity online, it’s now a major player in the lightening of your wallet. What’s

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more, that global adjustment fee helps subsidize exports of electricity from Ontario, as the fee does not apply outside of the province.

In the ideal world, each household would be energy independent, entirely eliminating the existing infrastructure and high operating costs, from producers to the grid. We’re not close to that yet, especially for large industrial consumers, but that should be the target. For a government that can’t even get conservation right – it’s the cheapest, most effective and most economically beneficial way to deal with energy – that’s an over-priced, behind-schedule bridge too far.