Ishmael N. Daro | March 26, 2015 | Last Updated: Mar 26 5:18 PM ET
Average energy bills in Ontario are set to increase by as much as $137 a year starting in 2016 due to program changes announced by the Liberal government Thursday, including a new rebate to help low-income families.
Starting Jan. 1, the new Ontario Electricity Support Program will save a low-income household between $20 and $50 a month depending on family size and income, Energy Minister Bob Chiarelli said Thursday.
“For many low-income Ontarians, paying their monthly electricity bill is a real challenge,” said Chiarelli. “Families should not have to choose between turning on the lights and putting food on the table.”
Other changes include the end of a $6 debt-reduction charge, which had gone toward paying off billions in debt from the old Ontario Hydro utility that was broken up in the late 1990s, and the end of the Clean Energy Benefit, which provided an average monthly reduction of $17. The effect will be a price hike for most Ontarians in a province that alreadyhas some of the highest energy costs in the country.
John Yakabuski, official opposition energy critic for the Progressive Conservatives, called the changes a “shell game.”
“Everything that this government has done over the last 12 years, whether it be by policy changes or by scandals and fiascoes, has sent electricity rates and hydro bills throughout Ontario through the roof,” he told the National Post.
NDP Leader Andrea Horwath said bills will go up for everyone, including low-income residents, because of the end of the Clean Energy Benefit and because the Liberals plan to privatize part of Hydro One.
“These things are going to cause rates to go up, not down,” Horwath said. “The government is playing a game here, and I don’t think the people of Ontario are going to buy it.”
The NDP also said electricity rates in Ontario have soared by 325 per cent since 2002, and are expected to climb another 40 per cent in the next few years.
“It’s not surprising that rates are going up,” energy analyst Tom Adams said of Thursday’s announcement. “Customers are used to this because they’ve been going up very steadily for years, especially since 2009.”
He also cautioned that even before the new prices come into effect in 2016, there will be two other price hikes in May and November adjusting the time-of-use rates regulating how much electricity costs at peak and off-peak hours.
“Your power bill has a lot of moving parts, and they’re all moving up,” he said.
It’s all part of what Adams describes as the “trainwreck” of Ontario’s energy sector, which is hopelessly opaque, complicated and spread out across numerous crown corporations, public and private utilities, and dozens of municipal distribution companies.
Adams says this unwieldy setup makes it hard for even politicians and journalists covering Queen’s Park to fully grasp how the province’s energy system works, let alone consumers puzzling through their hydro bills.
Critics of the Liberal government’s management of this sensitive file say the focus on green energy projects that failed to live up to their promised potential have contributed to high energy bills, as have expensive scandals such as the cancellation of two gas plants that cost Ontario taxpayers over $1 billion.
An auditor general’s report in December also singled out a $2-billion program to install smart meters across the province, blasting the initiative for costing twice as much as originally claimed and falling far short of the promised benefits and savings.
“Electricity politics is to Ontario what language politics is to Quebec,” Adams said, noting that controversies related to energy go back decades and span Tory and Liberal governments.
Adams said it’s easy to lose hope over the province’s dysfunctional electricity system, but said a moratorium on new programs and better transparency, including more regular financial reports, would be two steps in the right direction.
“There’s been a long historical evolution that got us to where we are today,” Adams said. “And what we do today will have echoes for decades.”