Ontario gas prices are low, for now
Expert credits move to nix cap-and-trade
Hovering just a few cents above a dollar a litre, the price of gas may seem low these days — in fact, lower than it’s been for nearly a year — and it may fall further yet.
Motorists across the GTA are currently seeing gas prices as low as $106.9 a litre, even less in some areas of Southern Ontario, and though the cost of filling up could still drop that will likely change dramatically as the worldwide demand for oil surges, global economic instability mounts and our Canadian carbon tax takes effect in the New Year.
Dan McTeague, senior analyst with Gasbuddy.com, credits Ontario Premier Doug Ford’s promise to reduce the price of gas by scrapping the previous government’s cap-and-trade plan, which has so far knocked about a nickel off the price of gas in Ontario. And it could reduce the price by another five cents a litre before the year’s end.
He says the other reason is the switch over to cheaper winter fuel from summer blend gasoline, which is more costly to produce due to additives used to cut down on evaporation in warm weather.
“I estimate that about 4.8 cents has been eliminated by walking away from the cap-and-trade tax. It could get cheaper, but I don’t know how he’s (Ford) going to do it,” McTeague added.
“If it happens, it’ll make it even cheaper, but we have yet to see in January, when the Trudeau government re-imposes the carbon tax to the tune of 5.3 cents a litre, what effect that will have.
“And I’m worried about what’s to come in 2019 with talk of recession and the trade war between China and the Unit-
GAS PRICES continued on B11
Turning to the governance agreement between the two parties, Rendahl asked this of Chris McGuire, the commission’s assistant director, energy regulation: “Don’t you agree that it shows that there’s a risk of political intervention by the province in Hydro One’s corporate affairs?”
To which McGuire responded: “I agree, yes, that there is a risk of that type of interference.”
Did he think the risk was greater than that expressed in the previous testimony of Schmidt himself? McGuire wasn’t sure about that. Here’s a line plucked from Schmidt’s direct testimony last April: “The Province does not have a role with the Hydro One Board in the processes of appointment, removal, replacement, and compensation relating to executive officers or over related succession planning.” And even more clearly: “the Province cannot interfere in the management or operations of Hydro One.”
I suspect the commissioners can’t quite believe they are still dealing with this file. At the time of Schmidt’s testimony, the $5.3-billion (U.S.) deal was billed by the Hydro executive team as a “confederation transaction,” which would not result in the consolidation of the two companies (the usual head count reduction and blending of headquarters, etc.), but see Avista retain what Schmidt called “a high degree of control” through its own board and management, remaining headquartered in Spokane.
Understandably, the UTC is now alert to how tricky language can be.
Consumers in the Pacific Northwest have concerns. In announcing the close of public comment a week ago, UTC administrative law judge Dennis Moss sounded weary. “We’ve got four volumes already,” he informed those gathered at the hearing, then wondered whether that would grow to five. Total comments as of the close of business Oct. 23 had reached 448. Those in favour: 13. Those opposed: 365. Undecided: 70.
Remember that the history of Avista, which traces its roots to Washington Water Power Co. and the first generators harnessing the Spokane River in 1886, runs as deep in the psyches of consumers over there as Ontario Hydro runs through the psyches of consumers here.
Avista customers in opposition fear rate hikes, are wary of smart meters, don’t like the idea of a foreign control, are concerned about potential political risks, to name a few. The rate concerns are wellfounded, given Premier Ford’s own comments about customers in Ontario struggling to pay their bills.
Here’s William McInerney: “Hydro One’s purchase of Avista is a great deal for (CEO) Scott Morris and his top executives and shareholders. It will be at the expense of all the ratepayers. Hydro One has nothing but problems north of the border. Look at their history.” Here’s Barry Remboldt: “I am a business owner in Spokane, I am animatedly opposed to a Canadian company owning Avistacorp.” And Dianne Schaefer: “Avista is our only power source & it is our rivers that provide that power. Why do we want Canada to dictate how that power is to be used & the cost of that power?” You get the gist. Hydro has promised benefits. Rate credits, for one. Home energy audits for 2,000 homes. A one-time $7-million donation to Avista’s charitable foundation. A further $4-million commitment to “low-income weatherization funding.”
One Spokane customer did some math subsequent to a presentation by a Hydro executive: “In the hour-long presentation and question-andanswer session he was unable to articulate any genuine benefit apart from $78 million over a five-year period in refunds to ratepayers, coming out to about a paltry $1.36 a month along with a few other small projects.”
Commissioner Rendahl was sensibly focused on what recourse would be available to ratepayers, or the commission, should the merger turn out to be a dud. “How can we un-ring a bell?” she asked.
The states of Oregon and Idaho have not yet rendered a decision on the merger. The Montana Public Service Commission voted in favour in June. Spokane holds the heart of the story. The Washington state commissioners are due to release their decision Dec. 14.
jenwells@thestar.ca