Ontario votes and voltage
This is one of a series of editorials on issues facing Ontario voters.
At the mere flick of a switch, the marvel of electricity is engaged to illuminate, warm, cool, boot up computers, ovens, refrigerators, vehicles and factories, to enable modern life.
For governments charged with supplying that power, the apparent simplicity of it all belies what is among the most complex — and politically volatile — of responsibilities.
Ontario’s power system is “the largest, most complex engineered system under the direction of decision-makers at Queen’s Park,” the province’s Society of Professional Engineers has said.
And as former Ontario premiers Ernie Eves and Dalton McGuinty (among others) can attest, it is in that system that political tombstones are frequently found.
Energy planning is a huge public-policy challenge. Power installations take years to plan, decades to build and cost billions of dollars. Yet every power plan is based on estimates, projections, educated guesses.
How much energy will be needed? Will the economy be robust or lethargic? What new technologies might appear to increase or reduce demand? Will populations increase by a lot, a little or at all?
All of which is to say Ontario voters considering the power plans of campaigning politicians in the coming weeks should beware those promising the dramatic quick-fixes, be it the summary firings and wholesale uprooting of wind turbines proposed by PC Leader Doug Ford, or the renationalizing of hydro transmission systems promised by Andrea Horwath’s NDP.
Those proposals might provide some momentary emotional satisfaction. But they constitute neither a plan nor even a savings, given contractual consequences or associated costs. They are effective as ideological signalling, to be sure. But Ontarians deserve credible energy alternatives and less of the politically-inspired action of the sort responsible for the current government’s biggest fiasco.
All parties should borrow a maxim from medicine and undertake, as a first principle, to do no harm. Because, put simply, energy is complicated.
Ontario has a hybrid system, 61-per-cent nuclear, 24-percent hydro, nine-per-cent natural gas and oil, six-per-cent wind and solar. It has a market-driven anda regulated marketplace, with a vast ecosystem of licensed distributors, equipment suppliers, contractors, engineers, marketers and retailers.
Beyond question, rates rose in recent years to levels painful to some households and costly to business and employment. One report said electricity prices in Ontario increased at almost four times the annual rate of inflation from 2008 to 2015.
It’s worth recalling, however, that the biggest driver of those rising rates was the more than $35 billion invested since 2003 in rebuilding the failing electricity system the current Liberal government inherited from its Progressive Conservative predecessor, which declined to grasp that nettle.
Rates rose due to closing coal plants, the single biggest reduction in carbon emissions in North America, if not the world. They rose because Ontario spent on nuclear, wind, hydro and solar supply, subsidized conservation and innovation, began the weaning from carbon that the future will require. And they rose, to be sure, because of the cost of cancelling gas plants.
Last year, the Liberal government intervened, belatedly by the premier’s own admission, to lower hydro bills.
Ontario rebated its portion of the HST. It transferred the cost of hydro subsidies for the poor, rural and remote residents from hydro bills to the general tax base. And it spread the amortization period for billions of dollars in improvements to the system over a longer term.
Those measures have seen electricity rates fall almost 25 per cent on the average monthly household bill.
With cleaner energy and the investment in supply, Ontario does not face the blackouts and brownouts of the fairly recent past and southern Ontario enjoys vastly more pleasant summer days.
The new problem is too much electricity and its sale to neighbouring jurisdictions at less than the cost of production.
If history is a guide, electricity rates will be perennially contentious in provincial politics. And they will continue to rise.
The province’s Long-Term Energy Plan released last year estimated that, on average, consumer and industrial electricity rates will increase in line with inflation over the next four years, then increase about five per cent annually from 2021 to 2027. The question to be faced is, who will foot the bill? Will consumers pay now or leave it to future generations? If willing to pick up the cheque now, how can the burden be more fairly distributed?
The Canadian Centre for Policy Alternatives has suggested a fairer way to spread the costs and savings.
The government’s across-the-board rebate gives the biggest savings to the richest, most energy-consuming households. Better, the centre said, a system geared to consumption and income. Other sound prescriptions are equally undramatic. For instance, Adam White, president and CEO at Powerconsumer Inc., has said an independent, transparent review of proposed expenditures might help avoid cost disasters, but his advice to aspiring Ontario leaders is more rational than rash. “Don’t ram things down people’s throats.” “Do make the right choice easy, safe and cheap as possible.” White sensibly observed that “generations of Ontarians have skin in” this debate.
Those generations will expect something better than an energy system shaped by vindictiveness, posturing or tantrum.