Tom Blackwell
National Post
June 9, 2000

Jim Wilson, the Ontario Energy Minister, says he’s cracking down on cities and towns across the province that want to hike electricity rates by as much as 17%.

But a prominent consumer watchdog said the action Mr. Wilson is planning is a meaningless response to a problem that’s been festering for a year.

"It’s almost a comedy skit," said Tom Adams of the group Energy Probe. "The minister has stood by and watched the foundation [be] put in place for an outrageous and totally unjustified rate increase … and at the 11th hour it’s dawning on him there’s a problem. But he has no grasp of how to solve it."

For example, homeowners in Toronto could face an 8.7% increase on July 1 and another 4.3% next year if the Ontario Energy Board approves its request.

Mr. Wilson said he’s issued a directive to the Ontario Energy Board to make consumer interests its top priority in deciding whether to approve increases.

Legislation enshrining that principle is likely to follow, Mr. Wilson said. The board now has to consider a series of factors, but they’re not ranked in any order, he added.

"They decided, many of them, to gouge their customers," Mr. Wilson said of municipalities.

"I didn’t think that I or this government would ever have to protect ratepayers from their local politicians, but unfortunately we’re in a situation where we have to do that."

Under a sweeping overhaul of the electricity sector, the province broke up Crown-owned Ontario Hydro into three companies and is now allowing competition among electricity producers.

At the same time, it allowed municipalities to run the electrical utilities that actually deliver power to homes and businesses as corporations, either profit-making or non-profit. They still have monopolies in their communities.

The Conservatives had repeatedly promised that the retooling of the electricity business would not bring higher costs to ratepayers, and could ultimately lead to savings.

But at least 23 municipalities, from Toronto to Niagara Falls, Thunder Bay and London, have applied for rate hikes ranging from 10% to 17%, according to Energy Ministry figures.

The problem is that the energy board implemented a formula for setting rates last summer that allowed for huge increases and the government did nothing to stop it, said Mr. Adams.

The directive to the board announced yesterday will do little to rectify that shortcoming, he said.