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Chamber to province: Tackle rising hydro costs

By Denis Langlois, Sun Times, Owen Sound, 


The Owen Sound & District Chamber of Commerce has joined the chorus that is calling on Queen’s Park to act swiftly to curb “unsustainable” energy prices in the province.

“The costs are just rising and rising and there doesn’t seem to be any end in sight and that’s one of the reasons why I think industry is leaving Ontario is because of our hydro costs,” Debbie McKague, chairwoman of the local business organization, said Tuesday in an interview.

Failure to act, she said, will force more businesses to move out of Ontario and harm the province’s economy.

“I think unemployment is going to get higher and higher because if you can go somewhere else and get the same thing cheaper, why would you not? That only makes good business sense, which is unfortunate,” McKague said.

The comments from the organization come on the heels of the release of a 23-page report by the Ontario Chamber of Commerce on the impact of high electricity costs on businesses.

The document, entitled “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market,” contains five recommendations on how to address the problem.

They include keeping the so-called debt retirement charge on residential electricity bills until the residual stranded debt from the former Ontario Hydro — estimated at $7.8 billion — is eliminated.

The province has announced that it will remove the charge from homeowners’ bills after this year— saving the average residential property owner about $70 a year — but it will remain for businesses and industry.

“In order to keep debt payment on target to end in 2017-18 and to spread the burden of costs, the DRC should remain on residential bills,” the report says.

The document was created after a year of research and consultation with businesses, government agencies and organizations.

It has been endorsed 100% by the Owen Sound & District Chamber of Commerce, chief executive officer Peter Reesor said.

The report says the high price of electricity is undermining the capacity of businesses to grow and hire new workers.

A survey by the Ontario Chamber of Commerce, the results of which are contained in the report, found that one in 20 businesses in the province expect they will be forced to close their doors in the next five years because of rising electricity prices.

“In addition, 38% will see their bottom line shrink, with the cost of electricity delaying or canceling investment in the years to come.”

The report says it is incumbent upon the government “to do what it can to ensure that Ontario remains among the most attractive places in the world to live and do business.

“And that includes bending the projected cost curve in electricity.”

The report says the five recommendations are initial steps “in the right direction” that the provincial government can feasibly take to constrain rising electricity costs, which it says are among the highest in North America.

The other recommendations are:

– making electricity pricing and system cost drivers more transparent so governments can be held accountable for past and future decisions,

– making it easier for local utilities to merge to create efficiencies,

– moving away from the current central procurement model for new electricity generation to a more competitive “capacity market” structure,

– and using smart meter data to address future system needs.