Hydro going up, despite 10% rate cut
Reduction starts in Jan.
Ontario hydro rates are on an unstoppable upward rise, Finance Minister Dwight Duncan said Thursday, even as he announced a 10 per cent rate cut beginning Jan. 1.
Duncan said the government’s investments in green energy projects and new transmission lines have saddled Ontario with mammoth costs that will continue to drive bills up over the next five years.
“We are all paying for decades of neglect by governments of all political stripes,” the provincial treasurer told the legislature.
The average annual savings of $150 per year will have the effect of slowing the annual rate of growth on hydro bills to 3.6 per cent, Duncan said.
Without the savings, rates would have risen 46 per cent over the next five years.
“Any politician who suggests, implies or tries to tell people that the price of electricity is going to go down over the next five years is simply not telling the truth,” the minister told reporters.
Duncan said energy sector spending — including guaran- teed contracts for wind and solar power that are 20 times current market rates — are essential for the province’s well-being.
The government’s temporary rate subsidy is aimed at quelling increasing dissatisfaction over spiking hydro bills, which have risen nearly 20 per cent in the past seven months.
The cost of the subsidy — $1.1 billion annually — will add pressure to the government’s growing obligations.
Expenditures now stand at $125.6 billion, a 68.5 per cent increase since the Liberals took power in 2003. The provincial deficit is projected to settle in at $18.7 billion by the end of fiscal 2010-11. News of the relief was welcome. “Ten per cent on my monthly utility bill is going to be huge in my business,” said Windsor-based developer Dante Capaldi. He has condominium projects in the city and across Essex County, including Portofino on Riverside Drive in the city and Heritage Park Villas in LaSalle.
“Any amount would be happily accepted,” said Windsor resident Pat Kelly, whose monthly bills typically run $200 to $300 in the summer months. “At least they realize hydro bills are high.”
The 10 per cent rate cut will begin in January and continue for five years. At that point, Duncan said consumers would get a continued break on their bills because long-term hydro debt charges would be paid off.
“We’re happy to see they’re finally paying attention,” said Ontario NDP Leader Andrea Horwath, who’s been urging a cut in the HST on electrical bills of at least the province’s eight per cent share.
But with even the government projecting electrical rates to go up another 46 per cent over the next five years “it’s not long-term relief,” Horwath said in a telephone interview.
“I’m glad they’re doing something,” said Earl Sisson, who lives in a 10-unit apartment building in Windsor. He said his hydro bills are modest — only about $43 a month — so the cut won’t amount to a lot. Sisson says he hopes he won’t have to do with a lot of paperwork to get the savings.
Rita Bastounas of Windsor wasn’t overwhelmed by the size of the cut on her family’s monthly bill of about $150. “I really don’t think it’ll have much of a difference.”
The province remains committed to billions of dollars of investment in green energy projects that will bring jobs to communities such as Windsor, still struggling with high unemployment, Duncan said Thursday.
Two renewable energy component plants have already set up in the Windsor area, and Duncan expects more. “We’ll have more to say about Samsung very soon,” Duncan said in a telephone interview.
The province has a $7-billion deal with Samsung to build four plants in Ontario and invest in 2,500 megawatts of wind and solar power projects. The Windsor area is among the sites under consideration.
Ontario’s has recovered more quickly than expected from the 2008-09 recession, but still has areas of concern, especially for the auto sector, which dominates the Windsor economy.
Duncan said overall real growth and jobs have bounced back, but not to pre-recession levels.