by Andy Frame, Toronto Star
Premier McGuinty, you have a lot of trouble on your hands and you know that hydro costs will be a major issue on election day, Oct. 6. The voters are cranky about five major problems your government has created:
• You committed millions of dollars to generate power from wind installations. Now you have cancelled offshore wind turbines and investors fear you will limit onshore installations as well.
• Many rural residents have invested thousands of dollars in solar panels but now Hydro One, your company, is unable to connect them to the grid. Their investment is gone.
• You cancelled a gas turbine installation in Oakville and face big cancellation costs to be paid by hydro customers. You said the power wasn’t needed — but now we find out you signed a 20-year contract. Millions more on the hydro bill for nothing.
• Hydro costs have doubled since you took office in 2003, and about 3 million residential customers are in pain.
• You spent about $1 million on a booklet sent to every household to tell us why hydro bills are up, and will go 42 per cent higher in five years. Hydro customers didn’t have to be told about the increase — they want to know what you are doing to get rates back down to an affordable level.
To add to all the trouble caused by your government, the Ontario Energy Board last week ruled that local hydro distributors could charge customers $18 million to recoup losses from a 2004 Supreme Court decision relating to excessive charges on overdue accounts. The cost should have been charged to profits.
The abused hydro customer pays again, and not a word from the government. Customers feel they have been abandoned.
To get out of trouble, try a customer-friendly strategy, guaranteed to reduce costs and lower hydro bills:
• Eliminate the province’s 8 per cent portion of the 13 per cent HST, and demand that the federal government eliminate its 5 per cent portion on the grounds that hydro is an essential service. You win twice: First with the 8 per cent reduction and, second, you will look like a hero even if the federal government won’t cut its 5 per cent. Savings to consumers? About $1 billion.
• Stop collecting taxes from the provincially owned Ontario Power Generation and Hydro One. That’s another $1 billion, and with that cost reduction you could push down hydro rates.
• Stop collecting dividends from OPG and Hydro One, and limit to 6 per cent the dividend that can be paid to shareholders of municipal electrical distributors. More cost savings and rate reductions.
• Stop issuing new contracts for wind and solar generation. You already have a major liability for an undependable source of power. It is time to stop increasing an outlay that weighs heavily on hydro costs and pushes up rates for consumers.
• Encourage the development of small-scale hydroelectric generation within municipalities and let the benefits flow to municipal governments. Hydro power is green energy that can be stored in reservoirs and used to its maximum advantage at peak use times.
If you take these five steps, hydro customers will see at least a 25 per cent reduction in their bills. You can take the credit, and it will pay off on election day.
Andy Frame is an electrical engineer and a former senior adviser for electrical power and Hydro utilities at the Ontario Ministry of Energy.