John Spears
Toronto Star
April 12, 2000

Energy board told phase-in hides effects of hikes.

Regulators shouldn’t cushion consumers from electricity rate increases triggered by Ontario’s new market-driven electricity system, says Energy Probe.

Tom Adams, executive director of the non-profit environment advocate, told the Ontario Energy Board yesterday that his group opposes phasing in new, higher electricity rates proposed by local utilities.

Phasing in higher rates, or deferring them for several years, isn’t a measure to protect consumers from “rate shock,” Adams argued.

Instead, it’s a way for the people who designed the new system to conceal the effects of their actions.

Adams argued that part of the rate increase sought by local utilities is unjustified. But he said if they’re going to charge unreasonable rates, the public should know.

“If you’re going to scam people, you’ve got to show them, clear and simple,” he said. “At least tell the customers what you’re doing.”

The energy board is holding hearings to consider a directive from Energy Minister Jim Wilson, in which he told the board to give priority to the interests of consumers when setting rates.

Wilson’s Conservative government promised that rates would fall as they threw open Ontario’s electricity market to competition.

But electric generation is still dominated by Ontario Power Generation, one of the units of the former Ontario Hydro, so its rates haven’t fallen.

Meanwhile, local utilities have been restructured on the province’s orders.

For the first time they must pay dividends to their municipal government shareholders, plus provincial taxes.

Because of the new costs, many local utilities say they’ll have to raise distribution rates.

Adams was challenged by Sheila Halladay, one of the four-member panel considering how to apply Wilson’s directive.

Halladay asked Adams why consumers would not be able to understand what was going on if the energy board and their local utilities clearly told them that higher rates would be phased in over, say, three years.

Her own parents are seniors on fixed income, Halladay said. She would have trouble explaining to them why they should pay higher rates right away when the payments could be deferred, she said.

“They would not say that I was acting in the public interest,” she told Adams.

Meanwhile, Oakville Mayor Ann Mulvale and Toronto Councillor Jack Layton complained that municipal utilities are paying more for electricity than Hydro One, the corporation that runs Ontario’s main transmission grid but has been buying up local utilities.

Hydro One spokesperson Terry Young said the comparison isn’t exact.

Hydro One is liable for tax payments that are not yet applied to the municipal utilities, he said, and that’s part of the reason Hydro One is charged less for power.