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Ontario is playing politics with power – again
MARGARET WENTE
The Globe and Mail
Published Tuesday, Nov. 03, 2015 8:00AM EST
Last updated Monday, Nov. 02, 2015 5:25PM EST
Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.
The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn’t the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario. The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the “clean energy benefit.” There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.
“Your power bill is out of control, and the provincial government doesn’t go a day without making it worse,” Mr. Adams says.
Not long ago Ontario’s energy prices were in the middle of the pack. Today they are sky-high. Much of the problem is policy-induced – a result of the governing Liberals’ costly green schemes, runaway benefits and pension costs for hydro workers, and political shenanigans dating back to the misty dawn of time. The government pretends that conservation can save you money if only you use your “smart meter” and switch to off-peak power. Good luck with that. Eight years ago, the price of off-peak power was about 3 cents per kilowatt-hour. Today it’s 8.3 cents.
Now the desperately cash-strapped government is selling off a big chunk of Hydro One to raise money. The shares go on sale this week, and eventually the sale could fetch as much as $9-billion. The Liberals plan to use the proceeds to pay down debt and invest in infrastructure, mainly public transit.
This may sound like a fine idea, but some folks aren’t so sure. They say it’s like selling your prize cow. The one-time windfall is awfully handy, but you’re going to miss the money you made from all that milk. And Hydro One – the mighty transmission and distribution utility – produces about $750-million a year for the province. That’s an awful lot of milk.
Awkwardly, the biggest critic of the Hydro One sale is Stephen LeClair, the government’s new independent budget watchdog. He says the sale will make Ontario’s problems worse. “The province’s fiscal position will deteriorate,” he warns.
The Liberals say the watchdog doesn’t understand the math. Mr. LeClair says they refused to show him the math. You can see why. The government’s math is based on a leap of faith and a pile of wishful thinking. Premier Kathleen Wynne assures us that these infrastructure investments will pay off by making the province more competitive. Which would be great, if true. But that’s the part you have to take on faith. Meanwhile, cynics think the main purpose of the sale is to fluff up the province’s books before the next election.
Why should the rest of Canada care about Ontario’s energy mess? Because our soaring power costs have made us less competitive than ever, and what’s bad for us is bad for you, too. And because we are an object lesson in how political interference can screw up energy policy.
If Ms. Wynne really wanted to do something about competitiveness, she would move mountains to keep energy prices in line. Instead, she’s driving small and medium-sized businesses nuts with soaring rates, and with a complicated pricing system that nobody can understand. Energy pricing in Ontario is a black box – a fact I am reminded of every time I open my electricity bill.
It will get worse before it gets better. To combat the presumed ravages of climate change, the government has embraced cap and trade, which will involve even bigger and blacker boxes as carbon emissions credits are allocated by the government. Only two things we know for sure. The lobbyists are dizzy with excitement. And the extra costs will inevitably be borne by you and me.
116 Comments
DB-TA 5 hours ago
Selling something priced with an 8.3% yield to reduce debts bearing interest at maybe 3% sounds like math that only an Ontario Liberal could love.
The most corrupt government in Canada is no longer based in Quebec.
3 replies
+52
Report Comment
Snort 5 hours ago
Ontario electricity supply and transmission utilities have been mis-managed by incompetent politicians since the dawn of time. But none have screwed it up more than McGuinty/Wynne.
+43
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Markp99 5 hours ago
It's even worse than the article states. Where I live a very significant hydro cost is buried in the various transportation fees - which cannot be accurately deciphered from the bill. I am an analyst, it is in my nature to figure stuff out, so I built a spreadsheet in an attempt to replicate my hydro bills. It cannot be done! When I contact Hydro One to ask why, there is always some hidden fee that is not identified on the bill! Bottom line if I take the dollars paid and divide by the kilowatt hours used I am paying roughly 23 cents per kilowatt hour, on average, all in. A far cry from the published rates!
How many years till we can get rid of Wynn?
4 replies
+40
Report Comment
HRH Bloggins 7 hours ago
The Liberals are utterly corrupt. The media should look at the people and companies making out like bandits on wind power, green energy etc.
I suggest you'd find most are Liberal bagmen.
1 reply
+28
Report Comment
EAC3 6 hours ago
These increases also hit renters and students particularly hard as they cannot do anything to increase their earnings when their electricity costs spike - my daughter recently rented an apartment in downtown Toronto for $1400 month (2 people sharing). The first cold month in 2014 she was hit with a $900 electricity bill since they had baseboard heating. She sealed around windows and openings, but ran bill son 600-700 every month last winter. There was no budget for this - the landlord offered a "rebate" of $150 per month but essentially the girls had to give up on a lot of other things they needed while they had this apartment. I was never so happy to see a school year end. We contacted Toronto Hydro the first month to express our dismay and the view that there must be an error. Their comment: no error, use off peak. Can you imagine? My daughter and her roommate froze as they kept the heat at 14C and tried to use little or no power. This is outrageous and no end in sight!
1 reply
+24
Report Comment
Wasabi Jones 6 hours ago
I'd feel sorry for Ontarians, really I would...but they elected this group of corrupt, lying, cheating, stealing incompetents four times. You get what you vote for, good and hard. Now please, for the sake of everyone else, Ontarians, please stop whining and take the self-inflicted pain.
3 replies
+21
Report Comment
DSB111 6 hours ago
Wynne is a clever and ruthless political competitor,
but as for intelligent governing, is just plain incompetent.
2 replies
+14
Report Comment
argyle5663 6 hours ago
It would be hard to imagine a portfolio that's been as badly mismanaged in Ontario as electricity policy. Treatment of the beer industry might rank a close second, but at least we don't have to drink beer. At what point will the Wynne government realize that electricity prices are becoming an untenable burden on residents and businesses? That limit is apparently nowhere in sight from the government's perspective. This debacle originated in the Harris years when Ontario Hydro was dismantled, but the stupidity has irreparably worsened under successive Liberal governments. It's time for MPPs, including Liberals, to take a firm stand on this for the sake of their constituents. Surely these MPPs saw what recently happened to Harper's crowd of trained seals, who for too long were apparently content to passively play follow the leader.
1 reply
+14
Report Comment
Steve1155 6 hours ago
The Liberals are just so bad and Ontarian's, I guess are so ..... uneducated about how things in government work that we are all screwed.
We just elected the man child who is Kathy Wynne's puppet to run the country.
All I can do is tell my children that once they get their almost free education in Canada to find a nice job in the USA.
1 reply
+13
Report Comment
Dean Snowden 6 hours ago
I seldom agree with Wente, but today I do. Something needs to be done.
Even still, she cannot help but grind her axe. She cites the "runaway benefits and pension costs for hydro workers" as one of the main culprits for price hikes. How about the runaway benefits and pension costs for Hydro Execs??
Sure, let's look at the salaries. But there is no way a CEO of a public utility should walk away with more than $4 million in annual compensation (base salary plus "bonuses").
4 replies
MARGARET WENTE
The Globe and Mail
Published Tuesday, Nov. 03, 2015 8:00AM EST
Last updated Monday, Nov. 02, 2015 5:25PM EST
- 116 Comments
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Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.
The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn’t the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario. The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the “clean energy benefit.” There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.
“Your power bill is out of control, and the provincial government doesn’t go a day without making it worse,” Mr. Adams says.
Not long ago Ontario’s energy prices were in the middle of the pack. Today they are sky-high. Much of the problem is policy-induced – a result of the governing Liberals’ costly green schemes, runaway benefits and pension costs for hydro workers, and political shenanigans dating back to the misty dawn of time. The government pretends that conservation can save you money if only you use your “smart meter” and switch to off-peak power. Good luck with that. Eight years ago, the price of off-peak power was about 3 cents per kilowatt-hour. Today it’s 8.3 cents.
Now the desperately cash-strapped government is selling off a big chunk of Hydro One to raise money. The shares go on sale this week, and eventually the sale could fetch as much as $9-billion. The Liberals plan to use the proceeds to pay down debt and invest in infrastructure, mainly public transit.
This may sound like a fine idea, but some folks aren’t so sure. They say it’s like selling your prize cow. The one-time windfall is awfully handy, but you’re going to miss the money you made from all that milk. And Hydro One – the mighty transmission and distribution utility – produces about $750-million a year for the province. That’s an awful lot of milk.
Awkwardly, the biggest critic of the Hydro One sale is Stephen LeClair, the government’s new independent budget watchdog. He says the sale will make Ontario’s problems worse. “The province’s fiscal position will deteriorate,” he warns.
The Liberals say the watchdog doesn’t understand the math. Mr. LeClair says they refused to show him the math. You can see why. The government’s math is based on a leap of faith and a pile of wishful thinking. Premier Kathleen Wynne assures us that these infrastructure investments will pay off by making the province more competitive. Which would be great, if true. But that’s the part you have to take on faith. Meanwhile, cynics think the main purpose of the sale is to fluff up the province’s books before the next election.
Why should the rest of Canada care about Ontario’s energy mess? Because our soaring power costs have made us less competitive than ever, and what’s bad for us is bad for you, too. And because we are an object lesson in how political interference can screw up energy policy.
If Ms. Wynne really wanted to do something about competitiveness, she would move mountains to keep energy prices in line. Instead, she’s driving small and medium-sized businesses nuts with soaring rates, and with a complicated pricing system that nobody can understand. Energy pricing in Ontario is a black box – a fact I am reminded of every time I open my electricity bill.
It will get worse before it gets better. To combat the presumed ravages of climate change, the government has embraced cap and trade, which will involve even bigger and blacker boxes as carbon emissions credits are allocated by the government. Only two things we know for sure. The lobbyists are dizzy with excitement. And the extra costs will inevitably be borne by you and me.
116 Comments
DB-TA 5 hours ago
Selling something priced with an 8.3% yield to reduce debts bearing interest at maybe 3% sounds like math that only an Ontario Liberal could love.
The most corrupt government in Canada is no longer based in Quebec.
3 replies
+52
Report Comment
Snort 5 hours ago
Ontario electricity supply and transmission utilities have been mis-managed by incompetent politicians since the dawn of time. But none have screwed it up more than McGuinty/Wynne.
+43
Report Comment
Markp99 5 hours ago
It's even worse than the article states. Where I live a very significant hydro cost is buried in the various transportation fees - which cannot be accurately deciphered from the bill. I am an analyst, it is in my nature to figure stuff out, so I built a spreadsheet in an attempt to replicate my hydro bills. It cannot be done! When I contact Hydro One to ask why, there is always some hidden fee that is not identified on the bill! Bottom line if I take the dollars paid and divide by the kilowatt hours used I am paying roughly 23 cents per kilowatt hour, on average, all in. A far cry from the published rates!
How many years till we can get rid of Wynn?
4 replies
+40
Report Comment
HRH Bloggins 7 hours ago
The Liberals are utterly corrupt. The media should look at the people and companies making out like bandits on wind power, green energy etc.
I suggest you'd find most are Liberal bagmen.
1 reply
+28
Report Comment
EAC3 6 hours ago
These increases also hit renters and students particularly hard as they cannot do anything to increase their earnings when their electricity costs spike - my daughter recently rented an apartment in downtown Toronto for $1400 month (2 people sharing). The first cold month in 2014 she was hit with a $900 electricity bill since they had baseboard heating. She sealed around windows and openings, but ran bill son 600-700 every month last winter. There was no budget for this - the landlord offered a "rebate" of $150 per month but essentially the girls had to give up on a lot of other things they needed while they had this apartment. I was never so happy to see a school year end. We contacted Toronto Hydro the first month to express our dismay and the view that there must be an error. Their comment: no error, use off peak. Can you imagine? My daughter and her roommate froze as they kept the heat at 14C and tried to use little or no power. This is outrageous and no end in sight!
1 reply
+24
Report Comment
Wasabi Jones 6 hours ago
I'd feel sorry for Ontarians, really I would...but they elected this group of corrupt, lying, cheating, stealing incompetents four times. You get what you vote for, good and hard. Now please, for the sake of everyone else, Ontarians, please stop whining and take the self-inflicted pain.
3 replies
+21
Report Comment
DSB111 6 hours ago
Wynne is a clever and ruthless political competitor,
but as for intelligent governing, is just plain incompetent.
2 replies
+14
Report Comment
argyle5663 6 hours ago
It would be hard to imagine a portfolio that's been as badly mismanaged in Ontario as electricity policy. Treatment of the beer industry might rank a close second, but at least we don't have to drink beer. At what point will the Wynne government realize that electricity prices are becoming an untenable burden on residents and businesses? That limit is apparently nowhere in sight from the government's perspective. This debacle originated in the Harris years when Ontario Hydro was dismantled, but the stupidity has irreparably worsened under successive Liberal governments. It's time for MPPs, including Liberals, to take a firm stand on this for the sake of their constituents. Surely these MPPs saw what recently happened to Harper's crowd of trained seals, who for too long were apparently content to passively play follow the leader.
1 reply
+14
Report Comment
Steve1155 6 hours ago
The Liberals are just so bad and Ontarian's, I guess are so ..... uneducated about how things in government work that we are all screwed.
We just elected the man child who is Kathy Wynne's puppet to run the country.
All I can do is tell my children that once they get their almost free education in Canada to find a nice job in the USA.
1 reply
+13
Report Comment
Dean Snowden 6 hours ago
I seldom agree with Wente, but today I do. Something needs to be done.
Even still, she cannot help but grind her axe. She cites the "runaway benefits and pension costs for hydro workers" as one of the main culprits for price hikes. How about the runaway benefits and pension costs for Hydro Execs??
Sure, let's look at the salaries. But there is no way a CEO of a public utility should walk away with more than $4 million in annual compensation (base salary plus "bonuses").
4 replies
