How do we make Ontario electricity more affordable for residents and business owners?
Hydro bills have gone up 100 per cent since 2006. This question now comes up constantly: what can we do about these huge charges?
When we ask how we can make electricity more affordable, we first have to ask how it became unaffordable in the first place.
Some blame green power for the high bills. Not true. Green power is about 12 per cent of our power bills, which have gone up 100 per cent in a decade.
In reality, the sell-off to private companies of the electricity system, piece by piece, is the fundamental problem. It started with the Conservatives in the late 1990s, and the Liberals are continuing the process. That adding of profit into our hydro bills has increased the cost of power without giving us any benefit. At the same time, because of the way these new private power contracts are written, we are stuck paying guaranteed profit for power plants whether we need them or not. Right now, Ontario generates more power than we can use, about $2 billion a year worth of surplus power that we sell to Quebec and New York at a deep — 75 per cent — discount. In fact, many times we have to pay them to take our power.
So, the answer to how we deal with the problem encompasses three actions. We need to stop selling off the system. We need to reduce all this surplus power. And, when we do need more power we need to invest in low-cost options like conservation for peoples’ homes and businesses to cut their power use, and new renewable power which has been dropping sharply in price.
That means stopping the sell-off of Hydro One, which has been in public hands for over a century. Hydro One provides the web of high-voltage power lines that holds the whole system together. A drive to higher profits for the investors will mean higher bills for all of us. It also means that when private contracts for power plants run out we need to end the contracts if we don’t need the power. Right now quite a few gas power plant contracts are coming to the end of their term. Generally speaking, we don’t need them and should pull the plug.
Recently the NDP put out a plan to reduce power costs by ending the privatization of the system. We also called for an end to time-of-use pricing that drives bills up. For many people time-of-use pricing increases their costs by about 10 per cent of their bill without actually making the electricity system work better. For young parents or seniors at home through the day, or for small businesses, this could make a real difference in their expenses.
The Liberal government has proposed to cut bills by borrowing tens of billions of dollars to buy down hydro bills with all of us paying for this later. It is a very pricey solution.
Peter Tabuns is the NDP energy critic and MPP for Toronto-Danforth.
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