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Natural gas prices and renewable sources to blame for hydro bill spike

Natural gas prices and renewable sources to blame for hydro bill spike

By Melanie Anderson, Sarnia Observer

Saturday, October 26, 2013 5:06:38 EDT PM

(QMI Agency file photo)

A pair of controversial energy sources are being blamed for a spike in electricity rates hitting consumers come next month.

“It looks like higher market price for natural gas was the main driver of the prices,” said Bluewater Power CEO Janice McMichael-Dennis.

A greater use of wind energy, among other renewable sources, is also at fault.

“The Ontario Energy Board (OEB) is forecasting more generation from renewable sources so that will push the price up because certainly your renewable sources of energy come at a higher price tag than your more traditional sources,” said McMichael-Dennis.

Parker Gallant, vice president of Wind Concerns Ontario, said that a chart obtained from the OEB showed just how much more money these renewable sources were costing the province.

“It showed that the supply of energy from wind, solar, and gas — because gas has to back it up — produced 17% of Ontario’s generation. But, if you look at the cost, it’s in excess of 43% of the total global adjustment pot,” said Gallant. “Wind and solar are basically costing us a lot of money .”

The OEB said the estimated price will likely add $4 to an average monthly bill and an overall 3% increase. As of Nov.1 off-peak power prices, between 7 p.m. and 7 a.m. and all weekends and holidays will jump by 7.5%.

Mid-peak prices which run between 11 a.m. to 5 p.m. weekdays will rise by 4.8% and peak prices that fall weekdays between 7 a.m. to 11 a.m. and 5 p.m. to 7 p.m. will climb 4%.

But, Gallant said that these numbers only represent a portion of your bill.

“They’re only adjusting the price of electricity which represents around 60% of your total bill because there’s also the regulatory charges, there’s the delivery charge from your local distribution company, and debt retirement.”

McMichael-Dennis said she never likes to see an increase in the prices.

“We’re always concerned when we see a price increase … the fact that we only locally control 20-25% of the bill means that we are at the mercy of other parties for the 75-80% so we are always hoping for the best.”

Gallant said it can be difficult for those who may be struggling to make ends meet.

“So those living on fixed income or single mothers are really going to be effected and the government doesn’t do a very good job of supporting those people.”

Price changes over the years

Nov. 1, 2013

• 12.9 cents per kilowatt hour for peak times

• 10.9 cents per kilowatt hour for mid-peak times

• 7.2 cents per kilowatt hour for non-peak times

Nov. 1, 2007

8.7 cents on peak times

3 cents off-peak times

Typically Ontario uses:

• 64% off-peak

• 18% mid-peak

• 18% on-peak

What others are saying:

“The bills are being driven up because of the high cost of nuclear. This is why we need to change direction and we have to focus on energy conservation and by importing low-cost water power from Quebec.” Jack Gibbons, chair of the Ontario Clean Air Alliance.

“Some of the factors include the forecast from the coming year and that includes more generation from source including renewables and higher natural gas fuel prices,” Vanda Wall, communications adviser for the Ontario Energy Board.

“What are we dong here? They’re not using the time-of-use to get the conservation that’s necessary, they’re effectively charging people too much for off-peak power. We should be awarding people for using off-peak power. Learning how to conserve energy, is our best source of new power.” Gord Miller, Ontario Environmental Commissioner .

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