Parker Gallant: Energy poverty in Ontario Chapter 1

(March 1, 2015) The Ontario Energy Board (OEB) annually puts out a consumer chart with the questions/issues most often asked about.

Coming in at the number four (4) slot was LEAP (Low-income Energy Assistance Program) ahead of “electricity rates” and “debt retirement charge”. LEAP was a creation of the Liberal Government when Brad Duguid was Energy Minister and developed as electricity rates had climbed upwards due to the measures taken by the government to “green” the electricity sector. The money doled out under LEAP for electricity consumers represents about 1/80th of 1% ($3.7 million for 2013) of gross revenue for the whole sector and 75 local distribution companies (LDC) and 5 natural gas distributors are required to ante up “the greater of 0.12% of their total Board-approved distribution revenue or $2,000.”

Researching “energy poverty” in the Province of Ontario is akin to undertaking a search for the “Holy Grail” so the information finally obtained took well over two months to gather and can still be labeled “sketchy”. The intent was to obtain information on “energy poverty” for all of Ontario but this was abandoned due to the lack of centralized data. The focus became Toronto.

All LDC are to submit a LEAP report by April 30th of the following year which the OEB assembles and issues in a consolidated report. The report for the year ended December 31, 2013 was issued February 17, 2015, 10 months after its receipt.

The LEAP program limits payout per customer to $500. per year ($600. if you heat with electricity) so if your LDC threatens to cut your power because you owe more you must access another program via the social agency in your municipality. The secondary program is referred to as the “Emergency Energy Fund” (EEF) and only available to “low income residents who are not in receipt of social assistance. In the past this program was part of the “Ministry of Community and Social Services” but is now funded via CHPI (Community Homelessness Prevention Initiative) under the Ministry of Municipal Affairs and Housing.

Queries made to find the foregoing information had me bouncing from one Ministry to the next and within those Ministries but I finally connected with a party who sent me the following:

in 2013, the Community Homelessness Prevention Initiative (CHPI) took effect. Under the program, five homelessness related programs, including the Emergency Energy Fund (EEF), were consolidated into one program. The CHPI is funded through the Ministry of Municipal Affairs and Housing.

In 2014-15, we are investing a total of $293.7 million under CHPI. Ontario’s 47 Service Managers can use this funding to create services that address local priorities and meet the needs of individuals and families who are homeless or at risk of becoming homeless, which could include supports that were formerly provided through the Emergency Energy Fund (EEF).

The following investments were made in EEF in the three years before CHPI took effect: 2009-10 – $2.13M, 2010-11 – $2.62M and 2011-12 – $2.93M.” To put some context on the latter; $3 million would represent the average cost of electricity for about 2,000 residential households of the 4.5 million currently in existence in the province. In other words it wouldn’t do much to relieve “energy poverty”.

What the foregoing seems to suggest is about 1% of the CHPI budget goes towards the EEF for households who have been told their electricity will be cut off by their LDC. So to satisfy the needs of people, not on welfare, the province and the LDC have about $7 million dollars available. The dollars earmarked to support people in “energy poverty” is less than $2 annually per ratepayer household whereas the costs to subsidize wind turbine developers costs about $150 per ratepayer.

According to the OEB’s LEAP report, applications for assistance increased to 11,462 for 2013; an increase of 1,240 (+15.4%) over 2012. They declined 2,170 (19%) of the applications submitted. Based on the reported number (4,460,593) of residential ratepayers on the OEB’s Yearbook of Distributors report for 2013 the total number of applications would represent only 0.25% of all ratepayer households which seems extremely low, based on information from other countries.

An article in “Der Spiegel” a year ago indicated that 17% of German households suffer from “energy poverty” so it seems unlikely that Ontario’s statistics are much different considering that Germany’s “Energiewendewas the model utilized for the Green Energy Act.

The OEB’s report notes 45 (38 of them by June 30, 2013) of the 75 LDC fully exhausted their LEAP funds. Of the remaining 30 eleven (11) of them had less than $1,000 remaining. For some inexplicable reason Hydro One had $264K remaining at year end. The latter may be a reflection on the one year investigation of the Ombudsman’s office or Hydro One writing off past due accounts! On the latter Hydro One’s 2014 annual report, released February 12, 2015 indicates their “allowance for doubtful accounts” grew from $23 million in 2012 to $36 million in 2013 and for 2014 shot up to $66 million– a growth of 165% in two years. It is hard to know if the jump reflects the mess created from their new

The next chapter in this saga will focus on “energy poverty” in Toronto from information we have been able to gather from the agencies responsible for coordinating the programs.
NB: Organizations in Canada and Europe (e.g., Co-operative Housing Federation of Canada and Ontario Non-Profit Housing Association, UK DECC, and the International Network for Sustainable Energy (“INSOFRE”)-Europe) have used the definition for energy/fuel poverty as energy/utility costs are more than 10% of a household’s income

Ontario Low-Income Energy Network (“LIEN”) defines energy poverty as disproportionate burden of electricity, natural gas and other utility costs on low-income households which reduce the funds available for food, clothing, medicine and other basic necessities”

Parker Gallant is a retired bank executive and a former director of Energy Probe Research Foundation. As with all independent bloggers on this site, Parker’s views do not necessarily reflect those of Energy Probe.

This entry was posted in Climate Change, Conservation, Consumer Health, Costs, Costs, Benefits and Risks, Electricity, Power Generation in Ontario, Reforming Ontario's Electrical Generation Sector, Reforming Ontario's Local Electrical Distribution Sector, Renewables and tagged , , , , , , , , . Bookmark the permalink.

8 Responses to Parker Gallant: Energy poverty in Ontario Chapter 1

  1. Francesca says:

    There are some really good pieces to the LEAP program, pieces that now allow us to do more to help people in our community.

    The problem is not enough funding.
    Hydro One never lasts more than 6 months, and now that Union Gas will come under LEAP, the funds are limited as well.

  2. Bob Lyman says:

    The Ontario Energy Policy formula is indeed strange.Since 2004, successive Liberal governments have turned their backs on the traditional goal of keeping electricity rates as low as possible consistent with assuring security and reliability of supply. In it place the goals has become to place “green energy” or environmental objectives above all else. To that end, the province has invested billions in the most expensive possible sources of generation, added expensive “smart” meters, and introduced time-of-use pricing to make electricity more expensive to consumers.It has raised the cost to Ontario industry to the point of driving away many plants, and the related jobs, that were dependent on competitively-priced electricity. Faced with a weaker economy, fewer jobs and significantly higher residential energy bills, the province then began token programs like LEAP that and back to a small portion of consumers a tiny share of the increased revenues collected through higher prices. Is LEAP supposed to make us believe that the government cares about the social impacts of its policies?

  3. Pingback: Parker Gallant: Energy Poverty in Ontario - Chapter 1 | The News in Port Colborne and Wainfleet

  4. Pingback: Parker Gallant: Energy Poverty in Ontario - Chapter 2 | The News in Port Colborne and Wainfleet

  5. Cold Air says:

    Out of curiousity I wondered what an assistance program limit would be in a more moderate climate.
    I picked Virginia – and the maximum dollars aren’t really different at all.
    Some days I’m not sure the government knows where Ontario is.

  6. Pingback: Energy Poverty « Newsbeat1

  7. Richard Mann says:

    We need an open and honest debate about climate change and our mitigation measures. The irony of all this is that Wind and Solar are not even reducing C02. Ontario’s own Engineering Society is telling us this. See the report, “Ontario’s Electricity Dilemma – Achieving Low Emissions at Reasonable Electricity Rates.” Ontario Society of Professional Engineers (OSPE), April 2015.

    Click to access 2015_Presentation_Elec_Dilem.pdf

    Page 15 of 23. “Why Will Emissions Double as We Add Wind and Solar Plants ?”

    – Wind and Solar require flexible backup generation.

    – Nuclear is too inflexible to backup renewables without expensive engineering changes to the reactors.

    – Flexible electric storage is too expensive at the moment.

    – Consequently natural gas provides the backup for wind and solar in North America.

    – When you add wind and solar you are actually forced to reduce nuclear genera,on to make room for more natural gas generation to provide flexible backup.

    – Ontario currently produces electricity at less than 40 grams of CO2 emissions/kWh.

    – Wind and solar with natural gas backup produces electricity at about 200 grams of CO 2 emissions/kWh. Therefore adding wind and solar to Ontario’s grid drives CO2 emissions higher. From 2016 to 2032 as Ontario phases out nuclear capacity to make room for wind and solar, CO2 emissions will double (2013 LTEP data).

    – In Ontario, with limited economic hydro and expensive storage, it is mathematically impossible to achieve low CO2 emissions at reasonable electricity prices without nuclear generation.

  8. Just want to say your article is as surprising.
    The clarity in your post is simply great and i can assume you’re an expert on this subject.
    Well with your permission allow me to grab your RSS feed to keep updated with forthcoming post.

    Thanks a million and please keep up the rewarding work.

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