By Randall Denley, The Ottawa Citizen
OTTAWA — Your electricity bills are already going up because of higher rates, the HST and smart meters. Now, the provincial government wants to drive power bills even higher by offering free energy-saving home retrofits and appliances to low income Ontarians. The full cost will almost certainly be passed on to all electricity users in their hydro bills.
This is another McGuinty government burden on consumers, much like the government’s eco fees, and it comes right out of the blue. The program was quietly ordered into existence by Energy Minister Brad Duguid through a ministerial directive in July. Despite the lack of public awareness, Duguid wants the Ontario Power Authority and the Ontario Energy Board to have something ready to go this fall.
While ordinary Ontarians can get up to $5,000 in government grants for energy efficiency improvements, the grants cover only a fraction of their real cost and homeowners have to pay more than $300 for energy audits to qualify.
The new low-income program proposes to include free energy audits as well as free programmable thermostats, low-flow showerheads, faucet aerators, compact fluorescent bulbs, insulation, weatherstripping, light fixtures, air conditioners, freezers, refrigerators and dehumidifiers. The showerheads and aerators will even be “professionally installed,” presumably to assist those who are unable to twist something on and off.
All of this is on top of a $455 million a year energy tax credit that the province introduced in the last budget. Only low-income people are eligible to collect the quarterly handouts.
The Ontario Power Authority’s proposals, to be released to “stakeholders” next week, suggest that the normal cost-benefit analysis applied to energy conservation programs be waived in the case of the low-income program.
The simple reason is that low income people can’t afford expensive energy conservation measures unless they are entirely funded by someone else.
Energy Minister Duguid is rather vague about how all of this will be paid for, but he does point to the $455 million energy tax credit as the “subsidy piece.” In an interview, Duguid says he doesn’t expect “significant rate increases,” as a result of the new program.
Still, someone will have to pay. If taxpayers aren’t getting the bill, then power users will. There is no other source of money. What’s really worrying is that the government is in such a rush to implement a program that it has no idea of the cost.
The OPA is looking at emulating a 2007 energy efficiency pilot project that cost $1,290 per home, but the new plan is much broader. If there is significant take-up on this program, the cost will quickly soar into the hundreds of millions of dollars. The OPA suggests an extensive education program and a blitz in poor neighbourhoods, to make people aware of the giveaways.
Potential eligibility for the new program is fairly broad. There are 733,000 households in Ontario that would be eligible, but the proposed program includes those who earn up to to 135 per cent of the low income cutoff sometimes used to define the poverty line. A family of four in Ottawa, for example, would be eligible if it had pre-tax income of $41,198. Providers of social assistance housing will also be eligible for grants to upgrade their buildings.
Through the price-regulating Ontario Energy Board, the new program also draws in the major gas companies to give heating-related cost breaks, even though gas prices actually went down in July. The gas companies are likely to handle the energy audit and insulation programs.
Like so many McGuinty programs, the low income energy plan has a goal that sounds good. Energy conservation is worthwhile, but it’s a big jump from that fact to the implementation of a hugely expensive program that makes other consumers pay for the increased energy efficiency, especially when the spending isn’t subject to a cost-benefit analysis.
“In an era of rising energy costs, low income Ontarians may need some assistance,” Duguid says. Among the long list of proposed benefits for low income people are a more lenient approach to those who don’t pay their bills. In Ottawa, there is already such a program, primarily funded by charities.
It’s pretty obvious that part of this program is intended to avoid the political embarrassment of poor people having their power cut off this winter because of Ontario’s high energy costs. The McGuinty government doesn’t want to pay a political price for driving up power rates, so it is pushing costs even higher for the average consumer. Do they think we’re made of money?
Contact Randall Denley at 613-596-3756 or by e-mail, email@example.com