Power prices short-circuiting senior’s budget

The McGuinty Liberals have already blown the bank on green energy, paying massive premiums for wind and solar.

By Rob Granastein, Toronto Sun

n October 1968, Doreen and Alexander Smith moved into their house of the future — one run completely on electricity.

There’s no furnace, no natural gas, only electric baseboard heat. Doreen Smith has never cooked using a gas stove.

“Gas was old, electricity was new,” said Smith, who lives near the GM plant in Oshawa, in a neighbourhood where all the houses run on electricity.

Today, though, she’s wondering what she signed up for 43 years ago.

On the horizon for her house is time-of-use billing and a 46% rate increase over the next five years — less the province’s 10% rebate, of course.

As seniors, the Smiths are home during the day, using heat, maybe even watching TV, when rates are highest.

“It’s going to be difficult to afford heating our home,” said the 75-year-old retiree. “We live on a small pension that hasn’t gone up since my husband retired in 1998.

“Something like this is going to make a difference,” she said. “We’re concerned.”

One of her biggest worries: “Who is going to want to buy a house that runs on electricity?”

According to Statistics Canada, 15.9% of Ontario homes list electricity as the primary heating or fuel source. Smith has watched what she pays for electricity very closely.

Her binder of power usage and payments dates back to 1972, when the energy board announced consumers would have to pay the real, unsubsidized price of power.

For the period from Sept. 1, 1972, to Aug. 31, 1973, she paid $292.23 for 23,800 kilowatt hours of power. That’s right, less than $300 for the entire year.

Since then, the Smiths have done everything they can to live more power smart.

They’ve added insulation, new doors, windows, screens, thermostats, whatever it took to run their home more efficiently. As seniors who don’t know how long they’ll be in the home, it makes no sense to spend tens of thousands of dollars more on additional efficiency measures.

Last year, the Smiths used 16,913 kWh, 29% less than in 1973, and paid $1,948.92. That’s an increase of 567%. By comparison, inflation ran at 427%, or 4.5% a year

Smith said she saw power costs go up by 12% in 1974, 21% in 1975, 15% in 1976 and 22% in 1977, and they weathered the storm.

But the new combination of time-of-use billing, soaring rates and HST has her worried, especially for some of her friends who are widows without a pension to rely on.

“No one can anticipate costs rising the way they have in this province,” Smith said. “There will be a lot of fuel poverty.

“The best way to make a Third World country is to make electricity unaffordable.”

Electricity pricing will be one of the sizzlers Premier Dalton McGuinty will have to avoid being zapped by during the fall election campaign.

Voters will head to the polls in October having faced rate increases of 48%, according to the Ontario Energy Board, since the Liberals took power.

That will be after a summer of paying for air conditioning under time-of-use billing — promised not to cost any extra, but in fact costing nearly everyone more. And now paying HST on top of those rising costs.

In a bid to ease the sting, consumers will see the Liberals’ 10% rebate on their electricity bills.

The energy file isn’t getting any easier.

Many of Ontario’s power plants are nearing the end of their useful life, transmission lines are getting older and less efficient.

With the future of Atomic Energy of Canada (AECL) uncertain, there may not be a Canadian company available to rebuild and expand our nuclear power capacity.

The McGuinty Liberals have already blown the bank on green energy, paying massive premiums for wind, solar and biomass power — so much so they had to dial back the rate being paid to farmers, who were turning their land into energy cash crops.

There’s also the controversial $7-billion deal with Samsung of Korea to provide 2,500 megawatts of wind and other green power.

The long-term Liberal power plan is an $87-billion whopper with lots of nuclear, wind, solar and biomass.

Power has never been a strong suit for McGuinty, who promised in 2003 to close coal plants by 2007 and now hopes to have it done by 2014.

But he was dealt a losing hand. This whopper of a file has been mismanaged for decades, leaving Ontario vulnerable to aging equipment, a growing population and changing needs.

Without the economic slowdown that crushed Ontario’s industrial sector — see GM — there would be a lot more brownouts to worry about in this province.

So hurray for the manufacturing crisis, right?

All this means very little to Doreen Smith, though, as she and other people across Ontario on fixed incomes, and/or with all-electric houses, are more worried about their own personal crises.

So expect sparks heading toward October’s provincial election, where political power may be decided, literally, based on power to the people.

3 thoughts on “Power prices short-circuiting senior’s budget

  1. The rising cost of power for heating and lighting and cooking is one factor only which will hit Ontarians in the wallet. The manufacturing, wholesale and retail sectors also face these increases which they will pass on in a compounding fashion to the consumer. It is far more serious an increase than most people are thinking.

  2. Most of the increase in residential costs comes from delivery charges.

    Comparing the Wholesale Market pricing with the year end figures of December 2010 to December 2004, the price went for MWh, plus regulatory, delivery and debt retirement charge, was $70.42 in 2004 (only electricity was $50.22), in 2010 it had risen only to $86.06. Electricity alone was $65.03 in 2010 – so basically the only price increase was in the cost per watt, and other charges were held constant.
    While your residential rates for delivery have probably come close to tripling in that time.
    Since 2004 I believe the entire MUSH (municipalities, universities, schools, hospitals) was moved to the Wholesale price plan.
    The price hasn’t risen nearly as much for large business and government as it has for residential consumers.

    I wouldn’t suggest we invite manufacturers to leave the province -by raising their electricity rates – but I’m confused as to why it’s important to pay the true cost of power only if you are a little guy.

  3. I’m still trying to recall all these “brown outs” and power shortages in Ontario caused
    by lack of system supply capacity…

    Can someone fill me in please?

    B.B.W.

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