Stephan Kleiser
Tillonburg News
April 14, 2006

Residential electricity charges in Ontario will be going up an average of 16 per cent next month and, according to published reports, that won’t be the end of it.

The average consumer using 1,000 kilowatts of power a month will see their rate increase by almost $10 to $62.

The new rates will increase the cost of hydro to 5.8 cents for the first 600 kilowatts and 6.8 cents for additional usage. Right now, rates are five cents and 5.8 cents respectively.

The province’s regulatory body, the Ontario Energy Board, said the new rates are necessary to pay for some of last summer’s expenses incurred when during record-breaking heat waves – consumers used record amounts of electricity at low rates even though the actual cost of electricity soared.

In addition, many consumers will face increased distribution rates. Distributors, like Tillsonburg Hydro Inc. which is 100 per cent owned by the town, have applied for rate increases to deliver power to consumers. Combining the hydro rate increases with distribution increases also approved this week, Ontarians are facing rate hikes from anywhere between three and 18 per cent.

According to a Canadian Press article, Tillsonburg will be the worst hit.

Average consumers in Toronto will see an increase of $6.72. Many in “Brantford, Niagara Falls, Midland and Welland will pay in the range of $15 more per month, while the Southwestern Ontario Town of Tillsonburg will be hit the hardest: monthly bills will go up an average of $20.26.”

Tillsonburg Councillor Fred Lewis, one of Tillsonburg hydro’s directors was surprised by the numbers saying he “can’t confirm that, the board hasn’t met and I don’t know why that would be the case. I don’t even know where these numbers came from.”

Steve Lund, the town’s director of operations, who is the senior staffer looking after the local hydro company, is out of town and couldn’t be reached.

When asked, Lewis did acknowledge however, that distributions rates were also approved and they may well play a role in the local increase.

Tillsonburg Mayor Stephen Molnar said there is actually a logical explanation behind those numbers, “which incidentally aren’t fair.” He said Tillsonburg’s distribution rates were frozen by the energy board in 1999, which just happened to be at a time when they were paying down reserves in accordance with legislation of the day. “So we were actually in a mode where we were charging less than cost in order to lower reserves.

“As a result, in the past seven years we have been losing money since we weren’t, until this week, permitted to increase rates to levels where they should be,” Molnar said.

That’s why Tillsonburg’s increase will be higher than others, because it is made up of two numbers, the hydro increase and the increase in distribution charges.

But there may be some good news.

Just as electricity costs soared during last summer’s heat wave which forced the province to import costly power, a mild summer this year could bring down costs.

If the McGuinty government continues to carry out its plans to shut down coal-fired plants, however, several observers, among the Toronto energy watchdog Energy Probe, have said rates will continue to climb regardless of the weather.

To help low-income residents, the provincial finance minister has announced plans to offer a one-time rebate of $120 to families earning up to $23,000. And there is a sliding scale all the way to $33,000 or less where residents will get back $20. Close to 1.5 million residents would qualify for a rebate of some kind under the program.

Officials also pushed the message that it is important for residents to lower their energy consumption. In addition, a number of energy saving measures and cash rebates are available to consumers who invest in more energy-efficient appliances. For more information, contact the local hydro company via the town’s customer service centre.