April Lindgren
Ottawa Citizen
October 12, 2006

The cost of electricity for the average Ontario household will fall by $6.60 to $55 per month beginning in November, but that’s still more than consumers were paying last winter.

Citing cooler summer weather, better nuclear power plant performance and lower fuel costs, the Ontario Energy Board announced Wednesday that as of Nov. 1, consumers who buy electricity from a utility will pay 5.5 cents per kilowatt hour for the first 1,000 kilowatt hours and 6.4 cents for consumption beyond that threshold. That’s down from 5.8 cents and 6.7 cents, the price in effect during the last six months.

The latest adjustment applies only to the cost of electricity and doesn’t affect the portion of the household power bill dealing with distribution costs.

In six months, the board will review the situation to ensure revenue is roughly in balance with the cost of generating power.

"I’m very pleased with the reduction," Energy Minister Dwight Duncan said. "It bodes well, I think, for future energy prices."

The price decline is one of the rare moments of financial relief Ontario power consumers have had in recent years and comes just 12 months before the next provincial election.

New Democrat Leader Howard Hampton described the latest price change as a "pre-election announcement" and predicted Ontarians won’t notice much of a difference on their final bills.

Conservative Leader John Tory dismissed the price reduction "as more of the Liberals’ self aggrandizing bull."

"People by the thousands will be dancing in the street because they will say that power rates have now only gone up 55 per cent since Mr. McGinty came to office and that that’s a great cause for celebration," he said mockingly.

The cost of electricity makes up about 50 per cent of the total cost to consumers while the cost of distributing the power makes up the balance.

Tom Adams of the electricity watchdog group Energy Probe warned bills will likely go back up next year because utilities will be looking for more money to improve crumbling infrastructure.

He also noted that while the government has signed contracts to increase the power supply, much of the new power is expensive and will eventually push up prices as it comes on line. Companies setting up wind power projects, for instance, are receiving between eight and 11 cents per kilowatt hour, while electricity from new natural gas fired plants will range in price from eight to 10 cents per kilowatt hour.

Duncan insisted the price decline will not jeopardize provincial conservation efforts, noting the two-tier pricing system will still reward households with power consumption of less than 1,000 kilowatt hours a month with lower prices.

Adams, however, said there "isn’t any hope" the Liberals can deliver on their pledge to reduce power consumption by five per cent by the end of 2007.

The latest data available show electricity consumption in Ontario continues to grow by about one per cent per year.

On Aug. 1, the province set an all-time record for electricity use, beating the previous record set in 2005 by 800 megawatts.

While the government painted Wednesday’s announcement as good news, environmental groups were harkening back to the Liberals’ decision not to shut down all the province’s coal-fired plants as promised during the last election.

A new report by Environmental Defence and the Canadian Environmental Law Association identified Ontario Power Generation, the operator of the province’s coal-fired power stations, as the country’s single largest producer of greenhouse gases.