PCs plan to replace Liberals’ hydro rate cut plan

Thestar.com
March 25, 2019
Rob Ferguson

Discounts for buying energy-efficient light bulbs and fixtures will be scrapped as the Ford government takes aim at the previous Liberal administration’s hydro plan while pledging to keep electricity rate hikes to the rate of inflation.

Energy Minister Greg Rickford said the moves under the “Fixing the Hydro Mess Act” proposed Thursday will save up to $442 million over three years by axing a number of conservation programs and another $4 billion in long-term borrowing for the Liberals’ hydro rate cut.

Energy Minister Greg Rickford says changes proposed in the Progressive Conservative’s “Fixing the Hydro Mess Act” tabled in the legislature on Thursday would save $442 million.

The Liberals’ 25-per-cent saving on electricity bills will be maintained, however, by putting the roughly $2 billion annual subsidy on the provincial books, adding to annual deficits in a measure opposition parties called a shell game.

Green Leader Mike Schreiner said the change in how the hydro rate cut plan is accounted for and paid for is merely giving the former Liberal government’s plan “a fresh coat of paint.”

The new plan is also a disincentive to conserve electricity, Schreiner added, which is a wrong-headed move given that it’s cheaper to conserve power than to make it.

“Across-the-board subsidies on hydro bill disproportionately benefit the wealthy because people with higher incomes use more electricity,” he said. “Subsidies should be targeted to low income, rural and remote consumers who need the help the most.”

In a news release, the government said conservation programs to be cancelled likely include incentives for upgrading of refrigeration equipment by businesses, energy usage audits, assistance in designing energy efficient equipment in new buildings, and incentives for installing energy efficient products in new homes.

Remaining conservation programs, such as energy retrofits, small business lighting upgrades, along with energy-saving measures for low-income households and programs for First Nations communities, will be moved from local electrical utilities to the Independent Electricity System Operator to save on duplicate administrative costs.

Rickford said the new method of accounting for the rate cut will be clearly shown on consumers’ electricity bills as a line item specifying the amount of the subsidy and is therefore “much more transparent” than the Liberal method.

“The games of smoke and mirrors are over,” he told a news conference, saying customers need to know the “true cost” of hydro.

“We’re focused on the stability of the cost of electricity,” Rickford added, pledging to continue to “chip away” at an election promise to cut residential rates a further 12 per cent.

New Democrat MPP Peter Tabuns, his party’s energy critic, warned the Conservative plan is “setting the grounds for big debt” and shreds conservation programs that help consumers and businesses save money by becoming more energy efficient.

Rickford said the plan’s savings will result in lower electricity bills for businesses, such as a reduction of $30,000 monthly for a mining company using 50,000 megawatt hours or $15,000 a month for an auto sector company using 15,000 megawatt hours.

The previous Liberal government brought in the 25-per-cent hydro rate cut two years ago amid pressure from consumers over rates that had risen sharply after years of upgrades to the system, making electricity prices a hot-button issue.

Other reforms under the proposed legislation expected to take effect by November include changes to the Ontario Energy Board, which sets the rules under which energy companies operate and adjudicates their applications for electricity and natural gas rate increases.

Rickford said the application process takes too long and the board needs to be more “accountable” to the public.

To that end, the new act would create a new position of chief executive at the OEB with separate responsibilities from the current chair of the board now running the arm’s-length organization of government. The legislation would also create a new role of commissioners to adjudicate matters under the board’s jurisdiction.

There is no estimate of how much the new OEB positions would cost the government, which has come under criticism for almost $200 million in costs to oust former Hydro One chief executive Mayo Schmidt and for a kill fee that must be paid for a cancelled Hydro One acquisition of U.S. energy company Avista. American regulators cited political interference by the Ford government in refusing to allow the $7 billion takeover to go ahead.

Tabuns said that “meddling” with Hydro One and removing Schmidt, whom Premier Doug Ford dubbed the “six million dollar man” for his annual salary, will result in higher electricity costs for Ontarians.