The Toronto Star
February 3, 2000

Urban homeowners can expect an average hike of about 6 per cent in electricity costs this fall.

The Ontario Energy Board has given the go-ahead to Ontario’s 255 municipal utilities to boost rates for industrial and residential customers Nov. 1.

The increases come despite repeated promises by Energy Minister Jim Wilson that deregulation of the electricity industry – both at the generation and delivery ends – would result in lower costs to consumers.

Wilson wasn’t available for comment yesterday.

The increase will be as low as 3 per cent for high-use customers and 10 per cent for low-use customers. There are a total of about 4 million electricity customers in the province.

Each utility will still have to appear before the energy board by May 1 to get its individual rate increases approved.

Toronto Hydro has not yet established a rate, a spokesperson said.

Energy Probe, an activist organization devoted to energy issues, has estimated the average residential bill could jump by $100 a year.

Meanwhile, about 1 million rural customers served by the Ontario Hydro Services Company – one of the five units created when Ontario Hydro was broken up on April 1 – are not affected by the energy board decision.

Municipal utilities are busy incorporating and looking to make a profit for their cash-starved municipal owners. Some municipalities, however, including Toronto, are talking about selling off theirs to private operators.

Critics say the rate increases will be a nightmare for Wilson because he promised that deregulation was the road to lower energy costs.

Michael Krizanc, a spokesperson for Wilson, said electricity is expected to cost less in the long run, not right away. He also said the municipal utilities will raise prices at their peril.

“They will be answerable to their ratepayers if they do that . . . every other place where they have done this (deregulation) rates have come down,” he said.

Liberal energy critic MPP Sean Conway (Renfrew-Nipissing-Pembroke) said a legislative committee looking into power deregulation was told 18 months ago rates would go up.

“Sad to say I’m not surprised because some very thoughtful witnesses warned the legislative committee that in the short and intermediate term . . . consumers can expect electricity rates to go up and quite dramatically,” Conway said.

Tom Adams, executive director of Energy Probe, said the hike is “totally unnecessary.”

“The distribution rate being charged now is more than enough to meet the cost of the distribution system,” Adams said. “Whether these utilities remain in public hands or whether they are privatized, rates should be going down.”

The Municipal Electric Association said its members warned from the outset that rates were bound to go up because of deregulation costs and the need to generate a profit.

“Certainly in the short term one cannot expect that rates will go down,” said Bob Kanduth, a spokesperson for the association.

Kanduth said the utilities are expecting consumer outrage mainly because Wilson was telling anyone who would listen the cost of electricity was going to go down.

Ken MacDonald, of Hydro Mississauga, said the cost of power in Mississauga is expected to go up by at least 5 per cent, in part because the city is expecting a “a reasonable return on what they own, which we have not formally done before.”

Krizanc, of Wilson’s office, said the increase approved by the energy board will be offset slightly by the fact Ontario Power Generation has been told to limit what it charges for the next 40 months as it gradually loosens its virtual monopoly on power generation.

Meanwhile, New Democratic Party MPP Marilyn Churley said municipalities will use their utilities as a backdoor to raise money without actually raising property taxes.

“It is a devious way to get taxes with blessing of the Harris government,” Churley said, adding she blames the government for raising consumer expectations.