Hydro fee hike may shock York Region seniors, young families

YorkRegion.com
Nov. 4, 2015
Chris Simon  

Many senior citizens and young families will feel the pinch soon, after yet another increase in hydro rates.

The new prices, which are set by the Ontario Energy Board and came into effect Nov. 1, will further compromise budgets for seniors and other residents living on fixed incomes, Tim Jones, director of development at Community and Home Assistance to Seniors (CHATS), said this week.

“It’s not a commodity that you choose how much you want,” he said. “Most seniors are in a position of having to watch their pennies. You’ve got to budget for it and when you look at your budget going up, it takes a hunk of what you’re trying to live on. If your cost-of-living or pension went up proportionate to your hydro, great. But it doesn’t. It’s definitely a concern; it’s scary when you’re somebody going into that sort of fixed income sooner than later and you wonder how you’re going to do it.”

While seniors can try to conserve energy, where possible, or ask family members to help pay bills, there is little stable relief in sight, Jones said.

Overall, the price will increase by about $4.42 per month on the electricity line of the hydro bill — about 3.4 per cent — for an average Ontario household that consumes about 800 kilowatt hours per month. The new rates will apply to most homes and small businesses in the province.

According to an energy board media release, the rates will climb to 8.3 cents per kWh for off-peak usage (up .3 cents), 12.8 cents for mid-peak (up .6 cents) and 17.5 cents for on-peak (up 1.4 cents).

The times for mid-peak and on-peak prices are also changing to winter time-of-use hours. The off-peak period remains 7 p.m. to 7 a.m. weekdays and all day weekends and holidays. Mid-peak occurs weekdays from 11 a.m. to 5 p.m. and on-peak runs weekdays from 7 to 11 a.m. and 5 to 7 p.m.

So, in other words, hydro use for families getting ready for school and work in the morning and during the busy dinner hour will rise.

But we’ll just have to adjust, the energy board contends.

“Ontarians have signalled a need for pricing that provides greater incentives to conserve,” the energy board says.

“Giving consumers incentives and opportunities to manage their bills by shifting their time of electricity use is a key objective of the energy board’s price plan.

“The board reviews electricity prices twice each year based on updated cost forecasts and they are designed to recover the actual cost of electricity.”

The board blames costs at the Ontario Power Generation’s nuclear and hydro-electric plants for about 40 per cent of the increase, while renewable energy sources are driving about 33 per cent of the bump.

But bills are only going to increase, especially with the Ontario Clean Energy Benefit ending Dec. 31.

That benefit currently provides a 10-per-cent rebate on many electricity taxes and charges.

“It is hard for people,” Newmarket Hydro director Paul Ferguson said, noting residents likely won’t see the effect of the new rates until their January bills arrive.

“The thing that concerns me is it will be a continuing trend. The cost is going to continue to go up, likely above the rate of inflation or wage increases.

“It’ll be harder for seniors and those on limited income to pay the bill.

“The two (increases) combined are significant. Increases in electricity are the new normal.”

This is the latest in a steady set of rate hikes during the past few years.

In November 2006, off-peak usage cost 3.4 cents per kWh, while mid-peak was 7.1 cents and on-peak sat at 9.7 cents, according to the board.

Ferguson says several factors have driven up the price of energy for nearly a decade, including the government’s decision to contract out electricity generation to gas and nuclear plants and the renewable power industry.  

“It’s the global adjustment that’s driving up the overall costs,” he said.

“The contracts are signed, the money will flow and the global adjustment will go up. They’re long-term. There’s really nothing we can do. The die is cast. As prices rise, conservation is the best thing you can do to fight these increases. You don’t save anymore — you avoid future cost. Change your light bulbs to LED; turn the lights out whenever you leave the room.

“The value of conservation is becoming more real every day. It’s the state of the nation in Ontario, unfortunately.”

The global adjustment is a charge on hydro bills that is used to bridge differences between the market price and the rates paid to regulated and contracted generators.

But when the energy board sets new rates, local electricity providers are forced to comply, Eric Fagen, PowerStream corporate communications vice president, said.

“They do their calculation based on contracts negotiated with generation companies… and demand forecasts,” he said.

“They come up with the price based on those factors and a few others as well. It’s basically to cover the cost of electricity. PowerStream has no role in that. We’re the face to the customer and we collect everything. But it’s a flow-through; PowerStream doesn’t keep all the money.”

While previous provincial governments have attempted to offset consumer costs through caps and other measures, historically, the resulting rates did not reflect the true expense of electricity production, Fagen said.  

“The issue over several years is the consumer wasn’t paying the real cost of electricity,” he said, noting PowerStream is trying to keep its distribution rates among the lowest in the province.

“Ratepayers were being protected, but the reality was they were still paying it as taxpayers. The money has to come from somewhere.

“In more recent years, governments decided they were going to have to manage it differently.”

PowerStream serves about 375,000 customers in communities throughout York Region and Simcoe County, including Aurora, Richmond Hill, Bradford West Gwillimbury, Markham, Vaughan and Barrie.