Only very wealthy people in Ontario will be able to afford electricity the way things are going!

When do we reach the point of no return on electricity rates in Ontario. What’s the “breaking point” where only the overly-wealthy will be able to afford what was once one of the cheapest and most reliable services available to consumers!

OR have we reached this point and the figures to prove it are just not available and won’t be, UNTIL after an election!

Is this a dirty secret that the Liberals don’t want to discuss because it “could” hamper their run for the roses?

All signs in Rural Ontario is that this point of non-affordability was reached a long long time ago.

Anyone living in small town Ontario KNOWS of older folks who are on a fixed income have experienced the toss up between warmth and food in their home.

The sad reality of our present day lifestyle in Ontario is the only “happy and well healed” citizens are on TV in glossy and politically correct commercials!

The true state of Ontario is rather ugly and forlorn and the following report will show you why!

Big Becky: what is THAT going to cost you?

The big hole where your money goes

In February 2010 an article penned for the Financial Post I disclosed that the Ontario Power Generation’s OPG) new Niagara tunnel (“Big Becky”) was not only running late but had incurred substantial cost overruns—in excess of $600 million, in fact.

The effects of that overrun have not affected our electricity prices yet, but the writing is now on the wall based on the OPG application of September 27, 2013.  The increases requested in that rate application by OPG, if approved, will increase electricity rates by at least $6-7.00 per month($72-84.00 annually) for the average 800-kilowatt (per month) consumer.   According to the submissions to the Ontario Energy Board (OEB), all of OPG’s “regulated” hydro rates will increase from 3.9 cents per kilowatt hour (kWh) to 4.4 cents per kWh due to the costs of the tunnel.  One-half a cent doesn’t sound like much, but when you consider that in 2012, OPG produced 18.5 billion kWh of unregulated hydro, it is time to bring out the calculators.

That overrun effectively means OPG is seeking to recover about $96 million annually for the cost of “Big Becky”for the next 50 years (amortization period), which equates to $4.6 billion for a tunnel originally estimated by OPG in the business case presented to their Board of Directors in 2005, to cost $873 million. It has cost 70% over that amount.

OPG is seeking approval for the foregoing as a rate increase for their “regulated” hydro as Big Becky is classified; that means it is considered “baseload” generation and its cost of production will be close to 10 cents a kWh.  At the same time they are also seeking approval for an even larger increase in their “unregulated” hydro which could generate as much as $300 million and was the cause of the media focus when they discovered the application. The “anti-nuclear” lobby painted it as a rate increase related to OPG’s nuclear refurbishment plans, which was a false premise.

What the cost overrun on “Big Becky” demonstrates is that oversight at Queens Park is sadly lacking in the energy portfolio.   It is disconcerting to realize that this project was $600 million over budget, yet to the best of the writer’s knowledge no OPG employee or Board member was castigated or lost their job. A private sector firm would investigate and allocate “cause” to one or several individuals in the event a project of this size exceeded budget by a factor of 70%.

Perhaps it is time to privatize the electricity sector as the private, but regulated, natural gas sector has demonstrated they can do a much better job.

©Parker Gallant                                                                                                                                          January 25, 2014

The views expressed here are those of the author.

Rural food bank demand rises along with hydro, propane costs

Lesley Johansen at House of Lazarus food bank.
Joanne Schnurr, CTV Ottawa January 28, 2014

Thousands of families in Eastern Ontario are choosing tonight between food and heat. Skyrocketing propane and hydro prices are forcing people to turn to food banks to help them survive.   Lesley Johansen helps out at this rural food bank in Dundas County.  She sees the increasing need, even feels it first hand as her hydro and propane bills rise well beyond her ability to pay.

“It’s come down to whether I don’t make a car payment or I don’t eat,” says Johansen.

For first time in her life, this very proud educated woman is considering turning to the food bank for help.

“I don’t want to be in this position in my life, I’m 40 years old. I’ve worked hard but the system fails.”

The system is failing a growing number of people.  1,372 families turned to the House of Lazarus Food Bank in Mountain last year.  That’s more than a 10 percent jump over the previous year.

Pauline Pratt is the Executive Director of the House of Lazarus, “The heating costs are taking up more money than what’s coming in,” she says. “Clients are very discouraged and feel very helpless and powerless because they have no choice; they have to have heat.”

Propane prices have doubled since October.  In many rural areas, hydro bills are higher than mortgage payments.

“In 64 years of my long life, this is the worst I’ve ever seen it and it’s not getting any better,” says the Mayor of North Grenville.  David Gordon says high utility costs are creating an urban-rural divide and pushing many of his residents below the poverty line.

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