The National Post
October 5, 2011
Glenn Fox And Parker Gallant
While attending an Energy Probe board of directors meeting almost a year ago (we are both directors), several of us around the table – as might be expected – discussed the Ontario government’s Green Energy Act and wondered aloud about the hidden costs associated with the act. Some speculated that the act might lead to a doubling of Ontario’s power rates. Could that possibly be true?
…We decided to focus only on renewable energy for wind and solar. The result, a study entitled Omitted Costs, Inflated Benefits: Renewable Energy Policy in Ontario, was released Oct. 1 by the peer-reviewed Bulletin of Science & Society. The study examines the additional costs to Ontario ratepayers omitted in the ministry’s LTEP, and the ministry’s claim that ratepayers’ electricity bills would increase by 46% by 2015, followed by a more modest increase after that, for an average 3.5% annual increase for the period 2010 to 2030.
For the average ratepayer, an annual electricity bill will escalate from $1,700 per year to $2,800 by 2015 and by the time the renewables envisaged in the LTEP are largely in place (expected in 2018) an average ratepayer will be paying in excess of $4,000 annually – well over a doubling. Put another way Ontario’s ratepayers will be paying in excess of 40¢ per kWh, placing them on a par with Denmark, which suffers the highest cost of electricity in the developed world.
Glenn Fox is a professor of natural resource economics at the University of Guelph. Parker Gallant is a retired banker.