Power rates uproar a ‘piling-on exercise’
Price increase also has benefits, Toronto Hydro executive says
Ontario Premier Kathleen Wynne is apologizing for rising electricity rates but the head of Toronto Hydro calls the ongoing uproar over power bills a “piling-on exercise.” Anthony Haines made the comments Wednesday in a morning speech to the Toronto Region Board of Trade.
The chief executive of the city-owned electricity distributor said Ontario’s move away from coal-fired power — Ontario closed its last plant in 2014 — was intended to improve the environment and allow “renewal and modernization of the power grid at the lowest possible price.”
But while “smog days” that once saw Torontonians urged to spend dozens of summer days indoors have disappeared, along with attendant health costs, people are judging Wynne — and the energy industry — solely on rates, Haines said.
Bills for Toronto Hydro’s residential customers have risen on average about 5 per cent per year for the past decade, he added, while Statistics Canada figures suggest electricity has remained steady at about 2 per cent of an average household’s total spending.
He pointed to a Canadian Press story citing internal government polling conducted before Wynne announced rate relief, suggesting 94 per cent of residents were eager for a break on rates, and said the premier has been “annihilated” in Question Period over energy costs.
“Somebody said to me one time ‘People love to be part of a gang.’ It’s a piling-on exercise right now and it affects us all,” Haines told the business audience.
“Everybody who is in the (energy) industry will be tainted by the piling-on so let’s have a fact-based conversation,” he said. City of Toronto water rates have risen more steeply — 234 per cent in the past decade, according to city figures — but few people are complaining about them.
Asked after the speech exactly who is “piling on” Wynne, Haines said: “Who isn’t? Everybody’s jumping on this issue. We need to be sensitive to this price increase but we need to look at the benefits that came along with it.
“I get that people are having a hard time paying their bills but let’s focus on helping those people who need it the most.”
To that end, he took issue with Wynne’s rebate that will cost taxpayers about $1 billion annually to save the typical Ontario household about $130 a year, with extra projected savings of $540 a year for rural electricity customers.
Haines said it makes more sense, and would be cheaper, to cut by half the bills of Toronto Hydro’s 104,000 households with incomes low enough to qualify for some form of assistance.
“If we have a finite amount of money (for relief ), rather than distribute it equally, my preferred path would be to focus on those people who need it most.”
For his utility, Haines said booming condo development and the cost of building the grid skyward remains a challenge, while the biggest opportunity is electric vehicles that provide revenue and spread out the costs of the existing grid.
Haines noted in his speech that the federal government announced in Toronto on Monday it will provide a loan to subsidize the installation of 25 quick-charge stations across Ontario. Rapid charging will cost $20 per hour, with per minute billing, while the standard charging costs $1.50 per hour.
Haines told the audience that electricity to charge an EV costs his utility about $2.50.
EVs are “the best news story as an industry and we can’t let people move electricity charging prices to gasoline equivalent,” he said. “There’s a wonderful opportunity for our customers to take advantage of this new energy source but we have to make sure we keep our eye out for abuse.”
His speech was the first since Mayor John Tory announced the end of discussions around the potential sale of part of Toronto Hydro to help fund grid upgrades as well as TTC and Toronto Community Housing capital projects.
The city instead plans to invest $200 million from reserve funds in Toronto Hydro to end a cash-flow crisis at the utility, while boosting Hydro’s annual dividend to the city that helps the government balance its books.
Haines said after the speech he is “quite happy” about the novel arrangement. Asked how much Hydro has spent on consultants and other costs related to plans for a possible privatization, he said: “I’m not going to talk about that — we had a range of people we used . . .”