Ontario electricity rates to keep rising long term
Liberal energy plan to take $20 billion out of rate base to mitigate increases.
TORONTO — There will be a new focus on helping Ontario consumers better control their electricity costs when the Liberal government releases its long-term energy plan Dec. 2, but the bottom line is rates will continue to increase.
Electricity rates in Ontario increased an average of 3.4% each year since the Liberals were elected in 2003, slightly below the 3.5% average for the previous 20 years, said Energy Minister Bob Chiarelli.
“Looking to the future, we expect that rates will continue to increase, but we have taken very significant steps to mitigate those rate increases,” said Chiarelli.
“That includes taking $20 billion out of the rate base moving forward, which will have a significant reduction in the level of increases that we’re going to see.”
The $20 billion taken out of the system includes $15 billion for the government’s decision not to build two new nuclear reactors and $3.7 billion in savings from renegotiating a green energy deal with Korean multinational Samsung.
Those steps will more than offset the impact of the estimated $1.1 billion cost of cancelling gas plants in Oakville and Mississauga and relocating them to the Kingston and Sarnia areas, said Chiarelli.
The province has spent $31 billion updating its electricity system in the past decade, including $10 billion on new transmission lines and the rest on new generation — mainly in the form of 19 new natural gas-fired plants, with two more to come.
Those gas plants give Ontario a lot of flexibility to meet demand, Chiarelli said, because they can be powered up and down very quickly, unlike nuclear reactors, and are always reliable, unlike wind and solar energy. The gas plants normally operate at 30%-to-60% capacity, which leaves room to ramp them up when needed.
Nuclear will remain the largest component of Ontario’s electricity mix, but is expected to fall to about 47% from around 55% in the new plan, which will reflect the fact the province will stop burning coal to generate power by the end of next year.
Chiarelli will also announce new smartphone apps to help customers better understand their electricity use and to give them some control over their bills, and said conservation will be a top priority under the new strategy.
“We’ve got very active programs that we’re just starting under the long term energy plan to educate the public on tools that they can use to better control their energy prices,” he said.
So-called demand response programs such as Peaksaver Plus, which gives the Independent Electricity System Operator the right to reduce electricity use by household appliances and air conditioners during peak demand periods, will be expanded to the business and commercial sector.
Unlike consumers who get no compensation, companies will be paid to sign up for the program. That cost will be offset by not having to pay for additional electricity generation, said Chiarelli.
The NDP doubts Chiarelli’s commitment to conservation, and calls new smartphone apps “window dressing” to prepare consumers to pay even more for power.
“I think he is softening them up for higher rates,” said NDP energy critic Peter Tabuns. “The Liberals continue the privatized power agenda from the Conservatives, which drives up rates, and they continue with nuclear investments without thinking about lower cost alternatives.”
While the New Democrats are pleased the Liberals cancelled the new nuclear reactors, they don’t want the government to proceed with the refurbishment of existing reactors at the Darlington generating station until they see a business case for the massive project.
The Progressive Conservatives, though, claim the Liberals gave up on Ontario’s manufacturing sector when they cancelled the new reactors, signalling that large employers that once drove up electricity demand are gone for good. But the Tories will only commit to taking the idea of new builds “under advisement.”
The Conservatives want to sell government-owned Ontario Power Generation and Hydro One, and say the Liberals have made a mess of the electricity file, especially with expensive wind and solar power subsidies, which the PCs promise to phase out.
“It’s very hard to trust this government on anything with respect to energy,” said PC energy critic Lisa MacLeod. “They’re using energy policy to play politics.”
© 2013 The Canadian Press