Wednesday, October 6, 2010

Electricity rates: Ontario ill-served by shrill debate

Toronto Star cares not what high rates are doing to you.

Published On Tue Oct 5 2010

When the Liberals came into office at Queen’s Park in 2003, they inherited a mess in the energy sector. The previous Conservative government had experimented with deregulation, and when electricity rates soared as a result, the Tories responded by freezing them, with taxpayers making up the difference. Investment in new supply dried up even as demand for electricity rose. Refurbishment of aging nuclear plants was put on hold after huge cost overruns. And the province grew ever more dependent for electricity on burning coal — a major source of both smog and greenhouse gas emissions.

To their credit, the Liberals have not shied away from tackling these problems with a series of measures, starting with the lifting of the rate freeze. They are phasing out the coal-fired power plants and replacing them with renewables and natural gas. They are investing heavily in hydro facilities. They are refurbishing nuclear plants in a systematic way. They are installing “smart meters” that charge households less for electricity used in off-peak hours. They are upgrading transmission lines.

All this is costing billions and driving up electricity rates. The opposition parties at Queen’s Park have seized on the rate hikes to denounce the government’s handling of the file while offering little, if anything, as an alternative. (Reading between the lines, however, one can surmise that the Conservatives plan to keep on burning coal and to scrap the Green Energy Act.)

The opposition clearly has the Liberals on the defensive. “I don’t think that we really took the time to help them (the public) understand why it is that we had to modernize our electricity system and that there are real costs associated with that,” Premier Dalton McGuinty told the Star last week.

To regain the upper hand in this debate, the government needs to produce a long-term power plan setting out where our electricity will come from and how we are going to pay for it in the coming decades. Such a plan was first promised several years ago and is long overdue. Energy Minister Brad Duguid is promising it will be released by the end of the year. That is a deadline that should not be missed.

The government also needs to come to grips with the alphabet soup of agencies that have replaced the old Ontario Hydro in the electricity field: OPA, OPG, IESO and so on. They appear to duplicate each other or to be working at cross-purposes. The government should issue a white paper outlining options for streamlining the sector.

The debate in Ontario on energy issues has been unfortunately reduced to sloganeering by both the government and opposition. The release of fact-based documents outlining plans and options for the future would be the first step toward restoring reason to the debate and allowing voters to make an informed choice.


  1. The Star has long been known for their Liberal editorial bias. However, I'll have to agree with them on this one

    1) The Liberals did inherit a mess of an electricity sector
    2) The Liberals have been trying to map a long term strategy for the province, something that previous governments have been reluctant to do since electricity has been a political hot potato in the past (see Ernie Eves in the run up to the 2003 election). You can debate the merits of their strategy (I have some issues with it myself) but at least they have one where others in the recent past have not.
    3) There has to be a level of transparency with the government and their plans. This is an issue that you have raised in the past and I believe that The Star is agreeing with you. I think that transparency is always a good thing
    4) Streamline the organizations. Again, something you have advocated for

    Overall, I think that The Star is saying that electricity is a vital issue in Ontario today and that the current debate is doing nothing to advance the issue.

  2. A recent Canadian Maunfacturers and Expoters Association study noted than in the next 5 years there will be a 48% increase in rates because of new supply coming on line. 62% of that increase will be the Green Energy Act.

    Currently, at least for wind, as much as 72% of your consumption charges is because of the Global Adjustment, something the Liberals invented so that regardless of the spot price for power, producers get a premium income. Example, spot price for power on any given day could be as low as $20/mWh, but the wind producers are guarrenteed $120/mWh. The Global Adjustment makes up the difference. See


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