HOW ONTARIO KEEPS THE TRUE COST OF NUCLEAR POWER OFF YOUR HYDRO BILL
Electricity prices in Ontario have long proven to be politically toxic.
Rapid increases between 2009 and 2016 contributed to the downfall of the Liberal governments of Dalton McGuinty and Kathleen Wynne.
Doug Ford and his Progressive Conservatives were elected on a pledge to bring hydro bills down, and the rapid increases have since ended — though it's not because power is cheaper. The true costs are now invisible to the consumer.
For 15 years, Ontarians saw the cost of nuclear power on their hydro bills each month. Between 2002 and 2017, there was a line item called the “debt retirement charge” that enlisted every ratepayer to chip away at more than $20 billion in debt left over from the splitup of Ontario Hydro — debt largely run up by construction overruns at the Darlington nuclear plant, which was completed in 1993. The nuclear debt was removed from bills in 2018 — but it didn't disappear. Instead, it was added onto the provincial books, where it is now considered part of the general public debt. As of last year, more than 30 years after Darlington went online, there was still $11.9 billion in debt remaining.
The province also brought in the Ontario Electricity Rebate, which subsidizes power bills with taxpayer dollars. While the rebate was introduced under McGuinty, Ford recently nearly doubled it — with an estimated price tag of $8.5 billion annually — to absorb an almost 30 per cent hike to the price of electricity.
The Ford government has blamed rate increases on the previous Liberal government's Green Energy Act, which paid a premium for renewable energy in an effort to kickstart a domestic wind and solar industry. The domestic renewables manufacturing sector failed to take off in the face of competition from China, but more than 33,000 renewable projects remain on the grid at inflated prices on 20year contracts. Today, these legacy contracts have pushed the cost of solar power up to the point that it's the highest among all types of generation in Ontario, when measured by kilowatt hour (kWh) of electricity produced. Wind isn't far behind.
But what the per kWh figures hide is that renewables make up such a small proportion of the energy production mix that they cannot be responsible for overall rate increases, according to a Star analysis of Ontario Energy Board and Independent Electricity System Operator data. Even though solar costs threeandahalf times more than nuclear per kWh, it only accounted for two per cent of the total cost of electricity in 2024 — too little to drive overall cost increases. Nuclear, by contrast, accounted for 56 per cent of Ontario's total cost of electricity last year. And while the costs of legacy renewables are inflated, they're fixed or even going down as their contracts expire and have been renewed at 30 per cent less than they were paid previously.
In contrast, nuclear costs keep going up. The refurbishment of the Pickering plant will cost three times more per kWh than the refurbishments of Darlington and four times more than Bruce. The costs of these refurbishments will start to be added to hydro bills when they return to service.
Because nuclear makes up such a large part of the electricity mix, even a little increase to the cost of nuclear will affect the price Ontarians pay for electricity — either via monthly bills or taxpayer funds.