Ellen Roseman
Toronto Star
June 6, 2001

The electricity you use this month will cost you 8 per cent more, thanks to an increase imposed by the Ontario government to cover rising debt charges.

The extra cost is $7.35 a month, or about $90 a year, for the average household that consumes 1,000 kilowatt hours of power a month.

With power rates unchanged since 1993, you might expect the government to make an effort to tell customers what’s behind the June 1 increase.

Think again.

Yesterday, I cruised the major government Web sites looking for information and found nothing at the Ontario Ministry of Energy, Science and Technology or the Ontario Energy Board. (How often do they update these sites, anyway?)

Real cost of power to the consumer is now 15 per cent less than in 1993.

The only place I got lucky was at Ontario Power Generation (http://www.opg.com), the provincial wholesaler, which posted a March 31 press release explaining the increase.

OPG president Ron Osborne said inflation has gone up 15 per cent during the eight-year rate freeze, meaning the real cost of power to the consumer is now 15 per cent less than in 1993. Meanwhile, environmental and fuel costs have been rising and there’s not enough cash flow to pay off the old Ontario Hydro debt.

Ontario Power Generation will collect the extra money and hand it all over to Ontario Electricity Financial Corp., which is responsible for paying down the debt.

Municipal utilities are trying to tell customers what’s going on, but some are doing a better job than others.

Toronto Hydro Electric System Ltd. has a message at its Web site saying electricity costs are going up, but doesn’t explain why. There’s not one word about Ontario Hydro’s debt.

Toronto Hydro says the rate increase is temporary and will stay until the electricity market opens to competition in May, 2002. It’s shown separately on customers’ bills as a "wholesale energy surcharge."

Enersource Hydro Mississauga, on the other hand, wants to make sure that customers know who’s to blame.

"Effective June 1, 2001, the Ontario government is increasing your electricity bill," reads the cover of the municipal utility’s bill insert this month.

As of 1999, Ontario’s 4.1 million electricity customers owed almost $10,000 apiece for the provincial electricity debt, said Enersource chair Alex Taylor in a news release.

While not challenging the intent of the increase to pay down debt, Taylor said he was concerned with the "relative absence of communication from the government to inform the public."

As an example of the unclear financial information, he pointed out that the current price increase of 0.735 cents a kilowatt hour precisely matches the debt retirement charge announced last June.

The debt retirement charge was to come into effect on market opening as a separate line item on consumer bills.

"Rather than tell us that this ‘cost of power surcharge’ is an early implementation of that process of unbundling existing charges from the consumer bill, we are left guessing where the government is going with this increase," Taylor said.

"Things seem to come out of the energy ministry in bits and pieces, unnecessarily complicating our job of explaining deregulation to consumers."

Tom Adams, director of Energy Probe, says customers already pay a debt retirement charge that is bundled into the overall price of power.

Electricity retailers offer protection only from commodity price increases, not from other charges such as debt retirement.

In Friday’s column, we’ll look at how electricity retailers get customers to sign away a valuable electricity price rebate.