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Here from commentator Parker Gallant, an opinion from yesterday’s National Post. We’re not sure anyone sells smelling salts anymore but this might be a good time to find out.

Ontario Power Trip: The $540-million electricity tax

 

  Apr 19, 2011 – 4:58 PM ET

Ontario electricity consumers received the latest whack to their pocketbooks Tuesday. The Ontario Energy Board (OEB) announced that electricity rates will rise anywhere from 8% to 15% beginning May 1. The biggest increases will hit consumers who are part of the province’s brave new world of time of use (TOU) pricing.  For off-peak electricity (between 11 pm to 7 am), the cost of electricity will jump 15% to 5.9 cents a kilowatt hour.  Mid-peak electricity (early morning to 11 am and early evenings) jumps 10% from 8.1 to 8.9 cents per kWh.  Peak use electricity (11 am to 5pm) rises 8% to 10.7 cents a kWh from 9.9 cents.

These rate increases come on top of a 12% increase last May. Note, also, that the increases are greater for off-peak than peak.

The near double-digit boost in  the price of electricity increase (with a total annual value of about $540-million) pretty much wipes out the McGuinty government’s much-vaunted “electricity benefit.” Under the benefit, the government takes 10% off  the electricity bills of consumers. But now the electricity companies will take most if not all of the 10% back.

In a disingenuous news release titled “Helping families, keeping electricity rates down,” Energy Minister Brad Duguid’s office tried to spin the official price increases by touting the 10% benefit without mentioning the near-10% increase in electricity rates just announced by the OEB.  Nor does the government highlight the policy absurdity:  Taxpayers will pay consumers a 10% reduction in their electricity bills to cover rising costs of electricity brought on by the government’s energy policies. Effectively, the government will tax Ontarian (or borrow now and tax later) to cover rising electricity costs.

For electricity users who are still not plugged into the province’s TOU-system, the average increase May 1 will be between 6% and 7%, depending on the tier.  Second tier (over 600 kWh) electricity rates will rise to 7.4 cents a kWh.   Most on the Regulated Price Plan (RPP) will be switched to TOU over the next several months so those still on the RPP will enjoy their lower increases for a short time only.

This year’s rate increases may not end here.  The next OEB price review is schedule to take place Nov. 1.  Will the OEB dodge the issue, since that date precedes by a few days a provincial election expected to have energy policy as a key topic?

With consumption basically flat year over year and hundreds of new high-price wind and solar systems entering the grid, the reality of the McGuinty Green Energy Plan, now nearing its second anniversary, is working its way into consumers bills.   Prices are going up in large part to cover the costs of subsidies to the developers, big and small.

In short, Ontario is seeing the results of paying for rooftop solar installation like those at the IKEA stores, which receive 71.3 cents per kWh under the Feed-in-Tarriff (FIT) program.  Meanwhile, these enterprises pay TOU rates for the actual power they consume. As that “renewable” energy enters the grid, the OEB forecasts the overall effect on the Global Adjustment (GA) account and resets the rates. The GA is a catch-all for all extra costs associated with the McGuinty government’s Green Energy Act. Those extras costs, pooled in the GA, are distributed among all ratepayers, who pick up the estimated costs through semi-annual rate adjustments. Last May it was 12%, although no rate increase was introduced last November.

Mr. Duguid’s press release Tuesday had the temerity to claim that “The Ontario Energy Board released updated electricity rates today showing the average household bill this May compared to May 2010 has remained flat.”  Flat! It was flat only if you start counting time AFTER the 12% increase last May 1, and don’t count the new increases starting this May 1.  No wonder Ontario’s books don’t balance.
As ratepayers we should express our thanks to the taxpayers for picking up the costs of that 10% “electricity benefit.” However, ratepayers are also taxpayers.  Maybe it’s time we stopped shuffling the deck chairs and face the reality that the Liberals have mortgaged Ontario for the next 20 years through their irrational electricity policies created by the Green Energy Act.

Parker Gallant is a former Canadian banker who looked at his Ontario electricity bill and didn’t like what he saw.

Northgowerwindactiongroup@yahoo.ca also on Twitter at northgowerwind

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Subsequent to editor Terence Corcoran writing about the complex situation of Ontario power generation and the fees being charged to consumers, several readers wrote in to the National Post, none too happy about what’s going on. And none of them are facing giant industrial wind turbines next to their homes, either.

Here are excerpts from some of the letters (full text is available online at nationalpost.com):

New power not needed

Re: Power failure, October 8. You couldn’t be more right about yet another government fiasco…

I’ve been watching the Ontario Power Generation website for the past two years. On the site they show what they are currently generating and compare it to their capacity. As of 7:30 a.m., OPG was generating approximately 9,700 megwatts and their stated capacity is 19,000 MW, which, incidentally, is down substantially from their 2008 stated cap[acity of 27,500 MW (probably due to shutdowns for upgrades, etc.). This means that during this morning’s peak usage period, Ontario was consuming approximately half of its generating capacity.

Even during the summer’s heat waves, we barely ever exceeded 60-70%. Ideally, a power producer should try to be at 90+% of capacity in order to use its assets efficiently (maybe even make some profit?). They should be encouraging people to consumer power, given the excess capacity.

With most of Ontario’s manufacturing industries at either 50% capacity (at best) or already gone for good (take a drive through the industrial park in Mississauga), there is absolutely no need for any new capacity, eve less so at prices only an idiot would agree to pay; why not just buy Quebec’s or Michigan’s excess power as necessary?

I don’t suppose OPG will be announcing any layoffs to try to size its business in accordance with the current economic climate and maintain fiscal stability … didn’t think so.

Glen Blenkarn, Pickering

After reading Mr. Corocran’s shocking summary of the present Ontario Liberal government’s green energy initiative, I realized that an important factor had been omitted, which suggests the overall costs will be higher still.

Mr. Smitherman and Mr. McGuinty have funded the entire project, coyly entitled the “Green Energy Act,” with borrowed money. This means that interest payments on the financing will push electricity prces up even higher than those predicted — much higher. Just how does Mr. McGuinty expect this dizzying financial burden to be repaid? Feed-back tariffs? Rebates? The provincial government will be forced into playing a very high-stakes shell game (read: increased taxes), for however you choose to slice it, it’s all taxpayers’ money anyway—spent before it has been earned.

Martin Bender, Ottawa

I believe the National Post made an error in publishing Terence Corcoran’s expose of George Smitherman’s actions as environment minister in the Financial Post. The fact that the programs Mr. Smitherman implemented will cause hydro rates in Ontario to rise 65% in the next five years affects every individual and business in this province. Something so punitive to the economy and well-being of the residents, should be on the front page of the National Post.

I suggest this makes the eHealth mess he instigated look like chump change.

Anne Robinson, Toronto

To contact the North Gower Wind Action Group, email northgowerwindactiongroup@yahoo.ca

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