The Canadian Press
The Hamilton Spectator
April 7, 2006

There could be shock waves around Ontario when higher hydro rates hit electricity bills after next month.

But homeowners shouldn’t expect any new government subsidies to curb costs, Premier Dalton McGuinty said yesterday.

The Ontario Energy Board is expected to announce as early as next week what rates most of the province’s four million homeowners will pay for electricity after May 1.

Energy sector expert Tom Adams said homeowners can expect bottom-line increases on hydro bills of between 5 per cent and 16 per cent, depending on distribution rates that local utilities charge to deliver electricity.

He said rates will increase even more in coming years as the government closes Ontario’s coal-fired power plants – cheap power producers, but heavy polluters, critics say – in favour of cleaner but more costly natural gas plants.

Provincial governments, in the past, stepped in to subsidize rates to mitigate voter anguish over excessive hydro costs.

But McGuinty said the OEB will decide independently, without political interference, how much homeowners should pay and that governments should no longer be putting off the cost to supply electricity to future generations.

"Historically … governments of all political stripes have shied away from ensuring that Ontarians in fact pay the actual cost of production for our electricity," McGuinty said.

"The net result was that we have saddled ourselves and our children with billions of dollars in debt accumulated because we didn’t pay the actual cost of electricity," the premier said.

Higher rates are already being put in place in other areas of the continent to reflect the increasing cost of power, and Ontario faces similar pressures, McGuinty said.

Consumers who signed with an electricity retailer will continue to pay the price set out in their contracts, which aren’t regulated by the OEB.