NDP has bold, bad plan to cut electricity prices

Ontario’s New Democrats have a plan to reduce the province’s electricity prices that would undo some of the dumb things the governing Liberals have done, but also most of the smart things.

Leader Andrea Horwath argues electricity should be cheaper because inexpensive power is a public good: “Electricity isn’t a luxury. It shouldn’t be priced like one,” she said.

Decades of pursuing cheap electricity got us an Ontario Hydro that was $38 billion in debt and a fragile power system that tipped into brownouts in the early 2000s.

But if inexpensive electricity is your overriding purpose, much of the NDP hydro policy flows logically.

Killing the policy that changes the price of electricity depending on what time of day you use it is the clearest example. The Liberals started doing that so there’s less of a gap between high- and low-consumption times.

Electricity can’t really be stored: it has to be generated when it’s used. If we don’t want brownouts, we need to build generation and transmission for the highest-demand times.

The auditor general and provincial environment commissioner have separately argued variable pricing hasn’t shifted people’s power use as much as we’d like because the high prices aren’t high enough and the low prices aren’t low enough.

In the NDP’s view, time-of-use pricing is inherently wrong and the limited shift is a sign people don’t respond to price signals anyway.

“Anecdotally, (time-of-use) billing is a source of stress for Ontarians, especially those who are unable to shift their use to off-peak times,” the party’s policy paper says.

The NDP would do away with it in favour of pushing harder on industrial conservation programs and the program that lets you sign up to, for instance, have your power company turn your air conditioner off when demand for power is high.

Meanwhile, they’d plan to shut down the aged nuclear plant at Pickering sooner than the 2024 date the current government has set. This could be OK if they’re right that prices don’t matter and peak-time demand doesn’t rise.

By the same logic of fairness, the NDP would make Hydro One charge remote customers the same as its urban customers, even though remote ones are much more expensive to serve.

The NDP would cover the cost by cutting the rent that publicly owned Ontario Power Generation pays for its dams on provincial rivers and making OPG pass the $330-million savings on to Hydro One. Money would flow from the provincial treasury to remote ratepayers.

They’d renationalize Hydro One, as well, paying for a share buyback over time with the utility’s own profits.

Those amount to billions of dollars over many years. The Liberals say Hydro One will be better managed under private control; the New Democrats assert it could be better managed under public control as long as it’s New Democrats doing the controlling.

An NDP government would name “an independent panel of energy experts and planners, businesses, labour, watchdogs, public power administrators, and consumer and environmental advocates to create systemic changes” to find 20 to 30 per cent in permanent savings.

I’ll coin Reevely’s Law, here and now: Any time a politician says we’ll solve a complicated problem by putting a lot of smart people in a room together, they’re BSing.

Nevertheless, by publishing a plan, the NDP are a step ahead of the Progressive Conservatives, who are stuck in complaining mode. It’s a plan consistent with NDP values, for better and for worse.

It’s also a plan that shows how hard it is to “solve” high electricity prices with anything but public cash. dreevely@postmedia.com