Gillian Livingston
Maclean’s magazine
March 31, 2005

Toronto: Flicking on the light switch in Ontario is going to cost more starting Friday, when electricity rates for residential consumers rise by as much as 10 per cent.

And consumers should expect prices to continue going up in the future, said Tom Adams, executive director of Energy Probe. "That’s quite certain," he said. "The only uncertainty is how high will it go." As of Friday, residential consumers will pay five cents per kilowatt-hour of electricity – up from 4.7 cents – for the first 750 kilowatt-hours used each month. Beyond that threshold, the cost rises to 5.8 cents per kilowatt-hour – up from 5.3 cents.

Distribution rates, the amount on the bill that goes to local electricity utilities, are also rising. Combined, the hikes mean electricity bills for residential consumers will go up between four and 10 per cent, the Ontario Energy Board said.

The rate increases come despite the Liberal government’s promise during the 2003 election campaign to keep electricity prices frozen at 4.3 cents per kilowatt-hour until 2006.

Since the Liberals have come to office, electricity prices have gone up 34 per cent, from a low of 4.3 cents per kilowatt-hour to the current high of 5.8 cents, said New Democrat Leader Howard Hampton.

"There is no conservation plan, there is no energy efficiency plan," Hampton said.

"This is simply a government going down the same road the Conservatives were going down: more reliance on very expensive private electricity, more and more Bay Street-style executive salaries."

"The ordinary person who is hard-pressed is having to pay for this on their hydro bill, and many people can’t afford it."

The rate hike is a cruel April Fool’s joke and comes without a government effort to provide people with the tools they need to reduce power consumption, said Paul Kahnert, a spokesman for the Ontario Electricity Coalition.

"This is the first of many increases," and will most hurt Ontarians on low or fixed incomes, he said.

Last summer, Energy Minister Dwight Duncan said the government would set up an Ontario Conservation Bureau by early 2005 to develop ideas to help people conserve.

That hasn’t happened yet, but Duncan said he’ll appoint a conservation officer and announce "sweeping" conservation legislation this spring.

"People can turn down their thermostats and turn off a light," Duncan said. "I’ve said all along that modest changes by consumers with or without smart meters can help them deal with what we estimate to be a six per cent increase."

With the rate hike, local utilities will be required to roll out conservation plans this year, said Allan Fogwill, director of applications for the Ontario Energy Board.

The "culture of conservation" that Duncan talked about "is not going to materialize unless you legislate aggressive conservation measures, as had been done around the world," Kahnert said.

The government should follow California’s lead and offer people additional discounts on their bills if they can cut consumption by 20 per cent, he said.

The government should also improve insulation codes for buildings, retrofit social housing, and offer rebates on energy efficient appliances, he said.

Hampton and Kahnert argued that prices are rising because the province is buying more expensive power from private producers rather than public ones.

But Adams said consumers are just seeing the actual costs for power generation, such as higher prices for coal and natural gas, debt costs and maintenance.

Other changes will come with the new price plan. Between Nov. 1 and April 30, the threshold for the lower price will rise to 1,000 kilowatt-hours a month to account for the greater need for electricity during cold months.

But between next May 1 to Oct. 31, the lower-price threshold drops to 600 kilowatt-hours per month.

This price plan is in place for one year. The Ontario Energy Board will re-examine prices next April, and every six months after that.