Tom Adams, Financial Post
Granting discounts to industry while spending on wind means chaos
With Ontario set for the highest electricity rates of any jurisdiction in North America by 2013, the McGuinty government is slapping another Band-Aid on the wounds of electricity consumers. Like so many of his previous Band-Aids, Premier Dalton McGuinty’s new quick fix will bring more long-term pain. On June 12, 2012, Energy Minister Chris Bentley announced the Industrial Electricity Incentive Program. The program would provide discounted long-term contracts to new and expanding large industrial operations, starting in January 2013.
Companies creating large new operations in Ontario are eligible for long-term contracts. The contracts are for up to 20 years at 5.5¢ per kilowatt hour — a rate that is 71% of rates paid by typical large industrials last year, as calculated by Bruce Sharp of Aegent Energy Advisors. Although most consumers have seen their rates rising about 10% per year since 2009 — a pace set to accelerate after 2013 with wind and solar expanding and nuclear about to shrink — the government is silent on the escalation, if any, for the new industrial discount. Read article