Ontario’s Energy Minister Bob Chiarelli never stops trying to “explain” to us lowly electrical consumers that IF we “conserve more energy” our bills will go down!
Lower use means less money into Hydro One’s bank account Bob! So what to do to keep this “profit margin” running along smoothly and able to make sure the executives of the energy sector (good old boys with the Government’s of Ontario (notice the plural use here) who sit in the OPA and OPG and Hydro One offices) keep on getting that gravy from the tax payers dinners!
So up goes the Stranded Debt limit, up goes the Delivery Charges, up goes the Global Adjustment and so many other taxes and add-ons, to make sure that bill just keeps going up and up!
Don’t even focus on your usage any more…………that’s a “red herring”! Try turning off all hydro usage for one month and then take a couple of heart pills before opening your bill the following month!
Just to finally read fellow users thoughts and actual case studies try this Facebook page dedicated to a really pissed off sector of our Ontario community!
|Trust me: it will work out for the better. Doesn’t it always?
Taxing Ratepayers: The Energy Minister giveth some but taketh away more
Ontario’s Energy Minister Bob Chiarelli was recently quoted in the Toronto Sun as saying, “When the OCEB (Ontario Clean Energy Benefit)comes off the [hydro] bill, residential customers don’t face additional costs.”
The news article actually began with this: “The provincial government is trying to rejig hydro bills to ensure that customers aren’t hit with a sharp increase when the Ontario Clean Energy Benefit is phased out, Energy Minister Bob Chiarelli says.” There was more: “The plan was to also eliminate the debt retirement charge on hydro bills at the same time, he said Wednesday.” Chiarelli also apparently said: “It was scheduled to come off at the time the Clean Energy Benefit was coming off, and they would balance each other out more or less.” He added, “The financial projections turned out not to be as precise as they were anticipated.”
The debt retirement charge or DRC has been around for over a decade; it was meant to pay off the “residual stranded debt” of $7.8 billion, not the full stranded debt—earnings and payments in lieu of taxes (PILT), were estimated to be sufficient to retire the remaining $11.8 billion. But now, the government through its continued interference in the energy sector, has in fact caused those “financial projections” referred to by the Minister to bevery imprecise. Minister Chiarelli did not mention that the last budget of former Finance Minister Dwight Duncan in 2012 revised the residual stranded debt upwards by $6.2 billion, some 12 years after its creation.
The balancing act won’t work
The Minister’s efforts to “balance” the Ontario Clean Energy Benefit (OCEB) expiry, with the cessation of collecting monies to retire the residual stranded debt won’t work. When the OCEB expires at the end of 2015, it will have increased the provincial debt by more than $5 billion since it was announced by former Energy Minister Brad Duguid back in December 2010.
The OCEB takes a full 10 per cent off of “average” ratepayers’ total electricity bills (before the HST) and when brought in
carried the following message from Minister Duguid: “Ontario’s Long-Term Energy Plan is investing in a reliable electricity system, cleaner air and the creation of thousands of jobs in our province. To help families with the cost of these investments, we’re taking 10 per cent off electricity bills through the new Ontario Clean Energy Benefit.” Minister Duguid failed to note that he had just launched the Long-Term Energy Plan (LTEP) one month earlier which predicted rates would increase 7.9 per cent annually for the ensuing five years and the Provincial Sales Tax of 8 per cent was added to electricity bills commencing July 1st
of that same year.
With the OCEB now due to expire, the government is expressing concern that the sudden increase of 10 per cent, on top of all of the other increases facing ratepayers, will be an issue with voters—the government is desperately searching for a way to contain the push-back. Apparently, Minister Chiarelli believes ratepayers will be appeased if he drops the DRC charge. The rhetoric displayed in his comments indicate he thinks this plan will somehow be an non event as he noted in the Sun article: “The ministry is now looking at options to ensure that… residential customers don’t face additional costs.”
What it means for the average ratepayer
Well, if he uses “Chiarelli math” it might work, but if he uses the math that is (hopefully) still taught in our schools he might find it won’t. Instead, it will result in an increase of $97 a year for the “average” ratepayer should he push ahead by dropping the DRC charge at the same time as the OCEB expires.
The “average” ratepayer is defined as someone who consumes 800 kilowatts (kWh) per month
by the Ontario Energy Board, which means that ratepayer now pays $5.60 per month towards retirement of the “residual stranded debt” at a rate of .07 cents per kWh. That ratepayer’s total bill is presently about $130.00 per month and includes the cost of electricity, delivery charges from the local distribution company, regulatory charges, and the DRC. The OCEB currently reduces that bill by $13.00. That reduction less the DRC savings would result in an increase of $7.40 per month. Add the HST to the increase and the additional cost becomes $8.11 per month or $97.00 annually per average ratepayer.
According to the OEB’s Yearbook
of Electricity Distributors, Ontario had 4,893,000 residential and small business ratepayers as of December 31, 2012 meaning those ratepayers (on average) would be paying an additional $475 million annually. That additional revenue would flow to the coffers of the Province and presumably go towards reducing the annual deficit.
In other words, this is a tax grab from ratepayers. That tax grab would be additional to the HST tax grab implemented July 1, 2010 which now garners approximately $1.2 billion. Couple that $1.2 billion with the additional $475 million and note that it exceeds the province’s commitment of $1.6 billion to the City of Toronto for its new subway. The subway funding commitment was a one-time payout, but these tax grabs appear to be forever.
This is not the break Ontario’s ratepayers are looking for!
February 1, 2014
The opinions expressed are those of the author and do not necessarily represent Wind Concerns Ontario policy.