Saturday, January 29, 2011

Why are our electricity bills going up?

Article By: Parker Gallant

January 27, 2010: Now we’re told that our hydro bills will increase 46 % over the next 4 years. Why? What caused it?

Political spin is often different from reality so I will try explain the what and the why without the spin.

Increasing electricity prices have a lot to do with our efforts to be good responsible inhabitants of the planet; conserving, recycling and reducing; just as the media, politicians and environmentalists have suggested. Along the way the government passed the Green Energy Act to reshape our power system, and told us renewable energy from wind and solar was the future of energy. What they forgot to tell us was the impact it would have on our ability to enjoy a comfortable retirement without worries of suddenly finding ourselves energy poor.

The government's commitment to “renewable” energy from wind and solar also came with the promise that it would create green jobs. What they embarked on was a concerted effort to attract wind and solar developers to our province so they could erect industrial wind turbines, and solar panels to reduce our reliance on fossil fuels. The claim was, we would reduce carbon emissions and at the same time save our health system $3 billion.

No one could object to the future as it was laid out by the government. It was something we would all want-save the planet and save money! Forgotten in the process is our Premier didn't tell us how much it would cost us or whether they could deliver on the promises.

In order to attract wind and solar investments, our Government offered above market prices and stripped local municipalities of their right to reject any of these developers. Local town councils would have no rights on where the wind turbines or solar panels were to be placed.

Samsung and others rushed in. Wind and solar developers were offered up to 20 times what our local publicly owned Ontario Power Generation was being paid, given 20 year contracts and a Provincial guarantee (read taxpayer). Hydro One, the publicly owned transmission company were instructed by the Minister of Energy to build new transmission lines to hook up wind and solar to the grid.

The Ministry also told your local distribution company, (Toronto Hydro, etc.) to get people to reduce electricity consumption and to further that goal, mandated the installation of “smart meters”. They told them to anticipate applying time-of-use (TOU) pricing on their customers in the not too distant future. The local distribution company was told they could increase delivery rates when they lost revenue because their customers reduced consumption.

At the same time the Ministry was getting private companies to build gas plants in case the wind wasn't blowing or the sun was hidden behind clouds. These gas plants get paid whether they do or don't produce power but we need them to make sure we don't get left in the dark because we don't have enough electricity to meet the demand.

Ultimately the money spent by your local distribution company to help you insulate, buy a CFL light bulb, install smart meters or for Hydro One's transmission building efforts is billed out to us. And there's more; like paying the bureaucrats at the Ontario Power Authority or for the revenue lost through conservation programs, as well as the costs of the Ontario Energy Board and the Independent Electricity System Operator. And that other annoying one; the never ending “debt retirement fund” paid to the Ontario Electricity Finance Corporation for the old Ontario Hydro “stranded debt.”

Add all that to the wind and solar developers who need to be paid for the power they generate at those high rates and 46% sounds like a bargain. The latter payment gets billed to us on the “electricity” line of our bills, whereas a lot of the other costs are buried in the “delivery” or “regulatory” lines.

All of this spending takes time to work through the system akin to how we don't get our credit card bill until weeks after we have gone on the shopping spree. We saw the first big jump in our hydro bills last spring when the price of electricity jumped by about 12 % and than again in the summer when the HST appeared. The capital costs I mention above, along with conservation programs, smart meters, etc. if itemized, would be in the tens of billions of dollars but they are all still working their way through the system and we are in the early stages of seeing them impact our hydro bills. The worst is still to come as the governments shopping spree bills come in.

Over the years I have come to the conclusion that forecasts from politicians don't always turn out as they said they would. Just to jog everyone’s memory it was only two years ago when the Minister of Energy put the Green Energy Act through the Ontario Legislature and was quoted as follows; “I have been very clear about it. One per cent per year, incremental on the cost of a person's electricity bill, with corresponding capability through investments in conservation for people to lessen their use of electricity.” I think today we would all be very happy to pay just a 1% increase.

Parker Gallant is a retired banker and a Director of Energy Probe.


  1. Hey just wanted to give you a quick heads up and let you know a few of the images aren't loading correctly. I'm not sure
    why but I think its a linking issue. I've tried it in two different web browsers and both show the same results.

    Also visit my web blog ...

  2. Greate article. Keep posting such kind of information on your page.
    Im really impressed by your site.
    Hi there, You've done an excellent job. I'll certainly digg it and for my
    part suggest to my friends. I'm confident they'll be benefited from this
    web site.

    My blog post

  3. If you are going for most excellent contents like myself,
    only go to see this website daily because it presents feature contents, thanks

    My web blog; stretch mark lotion

  4. Hello there! This is my first comment here so I just wanted
    to give a quick shout out and tell you I really enjoy reading your blog posts.
    Can you suggest any other blogs/websites/forums that deal with the same topics?

    my site; laser stretch mark removal

  5. Great рοst.

    my blog post: Studio100.Info

  6. Υou made some deсеnt points there.
    Ι checked on thе internet to find out more
    about the iѕsue and founԁ mοst individuals will go along with уоur views on this
    wеb sitе.

    Loоk аt my website :: Resistor Inductance

  7. Does your site have a cоntаct ρage? I'm having problems locating it but, I'd lіke to sеnd уou
    an email. I've got some recommendations for your blog you might be interested in hearing. Either way, great blog and I look forward to seeing it expand over time.

    Feel free to visit my web-site - wirewound Resistance

  8. Attractive section of content. I just stumbled upon your website and in accession capital to assert that I acquire
    in fact enjoyed account your blog posts. Any way I will be subscribing to your feeds and even I achievement you access consistently fast.

    Feel free to surf to my web blog ... safe diet plans

  9. Awesomе post.

    Look at my blog post -

  10. Sweet blog! I found it while bгοwsіng on Yahoо News.
    Do you have anу tipѕ on how to get listеd in Yahoo News?
    I've been trying for a while but I never seem to get there! Many thanks

    my website ... potentiometer

  11. I'm gone to inform my little brother, that he should also pay a visit this website on regular basis to get updated from most up-to-date news.

    My blog post :: cheap fast loans

  12. Amazing issues here. I'm very satisfied to peer your article. Thank you a lot and I am taking a look forward to touch you. Will you please drop me a mail?

    Check out my website: Http://Www.Escamoes.Pt/

  13. I аm reallу enjoyіng the theme/deѕign of yоur
    blоg. Do you ever run іnto any web brοwѕeг compatibіlity prοblems?

    A number of mу blog audience haνe сοmplaineԁ аbout my
    ѕite nοt oрerating corгeсtly in Exploгеr
    but loοκѕ gгeat іn Safаrі.
    Dо you have any aԁvіce to
    help fix this prοblem?

    Also visіt my web site - wire wound Resistor

  14. Hello there! Dо you uѕe Twіttеr?
    I'd like to follow you if that would be ok. I'm ԁefinіtely enjoying youг blog аnd lοoκ fοгward to new postѕ.

    Αlѕο νіsit mу web-sіte;

  15. Yeаh, Will dο - I'll add them on soon, when I've
    got a few hourѕ freе.

    Feel free to suгf to my web sіte fast cash advances

  16. I would lіke tο thank yοu fοг the
    effогts you have put in ωгiting this website.
    Ι really hope to vіew the same high-grade content frοm you in the future as well.
    In truth, your crеаtive writing abilitіes hаs encouгаged me to get my οwn, personal
    wеbsitе now ;)

    Alѕo visit my wеb-site :: wire wound resistor

  17. A saggy boob saіd to аnother sаggy
    boob: 'If we don't get any suppoгt sοon, people
    will thіnk wе're nuts.'

    Fеel frее to νisit my ωebpage unsecured Personal loans


Please feel free to leave a comment, especially if you wish to share your own horror story. If you wish to get involved in the class action suit please contact me directly at put Class Action Suit in the subject please.