Ontario Power Rates Rising

Electricity prices for Ontario households will rise about 4.3% for the commodity portion of the bill starting Nov. 1. The Toronto Sun has some coverage here.

This increase applies for the next 6 months. The last increase for the commodity portion of the bill kicked in May 1 and was 6%.

The non-commodity portion of the power bill — particularly the charges for transmission and distribution — are also rising very steeply. For example, Toronto Hydro has a proposal now before the Ontario Energy Board seeking distribution rate increases for households of 18.7% in 2012, 12% in 2013, and 12% in 2014.

The increase was announced by the Ontario Energy Board. Those concerned by the increase should recognize that the cause of the increase is not the Ontario Energy Board but the rising underlying costs of Ontario’s power system.

One key driver for escalating cost is the Green Energy Act. When the Act was introduced, then energy minister George Smitherman, promised that it wouldn’t make rates go up more than 1% per year. It is now obvious that the Green Energy Act alone is driving up rates at many times that rate.

Some advocates for the Green Energy Act would have you believe that power rates for everyone are going up. Not true.

The average cost of power in Ontario for households passed the U.S. average in 2009. Since then, their rates have dropped. The U.S. government’s well respected Energy Information Administration forecasts that household power rates in the U.S. will keep dropping over this decade. Meanwhile, Ontario rates have just got started a wild ride upward. Look for overall rate increases of at least 8% per year for the next several years.

One impact of the increase announced yesterday is that it will increase the provincial deficit. The Ontario government instituted a program earlier this year, called to Ontario Clean Energy Benefit,  which transfers 10% of household, farm and small business bills to the provincial government’s account to be paid by taxpayers.

 

4 Comments

  1. I looked at the average cost per kwh on my bills over the last 11 months and no matter how much usage i switched to off peak it stayed the same at around 20 cents per kilowatt hour. This means effectively that on peak and mid peak costs the same as off peak.

    This is disgusting in my opinion: to manipulate and scare people into behavior modification because they can’t manage themselves. Sickening. False. Misleading. At this point I no longer wish to do business with them in any way shape or form. Seeing how they have managed themselves (and i use that term loosely) and continue to do so going I will be going off grid ASAP. Sir Adam beck must be doing cartwheels in his grave.

  2. You have to subtract the fixed and water portion of the bill prior to calculating the effective rate – electricity in ontario does not cost 20 cents per kwh even during peak times. In some areas it’s 15+ during the peak periods.

    Since weekends are considered off peak, 50-60% (or more) of residential consumption occurs during off peak periods.

    The difference between off peak and peak is about 50% once all charges are taken into consideration (50% more expensive, that is)

    Shifting small loads doesn’t make a difference and isn’t worth while; it only makes sense to shift the largest loads to off-peak. (dryer, a/c, dehumidifier if you have one, stove)

  3. With respect to going off grid, I hope you were kidding.

    If you think grid electricity is expensive, you’ll be in for a very large shock when you find out how much it would cost to take the typical north american house which uses 20-40kwh per day off the grid.

    • I agree with ij on the folly of thinking that the solution to rising power prices is to go off grid. Going off grid and maintaining a level of service comparable to that available from the grid requires expensive equipment, nasty batteries, lots of maintenance, and significant engineering capability.

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