Electricity protesters will converge on the Ontario legislature starting at noon May 13. The protest will be an important gauge of the extent of public anger over soaring rates, particularly Hydro One’s rural rates. But, when it comes to solutions, expect more heat than light.
The organizers have some smart tactics that have the potential to become forceful.
TIE RED RIBBONS AROUND YOUR HYDRO POLES- DO NOT STAPLE OR NAIL THEM ON..TO SHOW OUR SOLIDARITY ON FIGHTING HYDRO ONE (RED BECAUSE WE ARE MAD AND SEEING RED)
For all the anger, organizational capacity, outreach, and commitment behind this movement, how solid are the solutions they propose?
Here is a summary of the substance of the “Enough is Enough” petition:
WE demand … a standard (distribution) charge, the same for all customers in Ontario that reflects the actual cost of hydroelectric delivery.
Regulatory charges are inexcusable and need to be removed.
WE demand the immediate removal of the HST on Hydro bills…
WE demand the immediate removal of the debt retirement charge for all customers…
WE demand the removal of all smart meters to be replaced with analog meters…
WE DEMAND ACTION ON THIS MATTER IMMEDIATELY!
Every element of this menu would make Ontario’s developing electricity disaster worse, not better.
Averaging distribution charges across the province would reduce the transparency and accountability to consumers of distribution utilities. “Enough is Enough” rural supporters already receive a variety of subsidies like Rural Rate Assistance. Cost shifting and subsidies fail to address root causes.
Regulatory costs are a fact of life in the power sector and should be recovered from consumers in a transparent fashion. Complaints about the components of regulatory charges are fair game but to suggest that somehow regulation should be free or that regulatory costs should be recovered from some source other than consumers are claims too ridiculous to debate.
Shifting the HST away from electricity only transfers the burden of taxation to other goods and services. Having a roof over your head is even more critical to your survival than access to affordable, reliable electricity but shingles and roofing service are both taxed. Alternatives to electricity, like attic insulation, are subject to HST, as are substitutes for electricity, like natural gas and propane. Cherry picking particular goods or services for tax shifts is bad tax policy that would further politicize an already excessively politicized power situation.
Removing the Debt Reduction Charge (DRC) has a superficial appeal. The Auditor General has pointed out that since it was introduced in 2002, the DRC has collected more from consumers than the interest and principal of a debt held by Ontario Electricity Financial Corporation associated with the DRC, called the “Residual Stranded Debt” (RSD). Though accurate, this analysis of the DRC misses the bigger picture. The Auditor General has also correctly noted that the RSD is nothing but a subset of Ontario Electricity Financial Corporation’s “Stranded Debt”. The full extent of the Stranded Debt, which depends on factors like the enterprise value of OPG, is unknown but we do know it is very big. Even in the government’s rosy-eyed view, the Stranded Debt is $8.3 billion as of March 31, 2015. The Ontario government’s current plan for the DRC is to eliminate the collection of DRC on residential consumers starting January 1, 2016 but that is just smoke and mirrors to mollify public anger. OEFC’s overall debt at the end of 2014 was $26.1 billion. Since OEFC was created, no government has ever revealed any plan explaining how OEFC’s debts will be eliminated. Watch for the residential DRC to be replaced by new and more carefully hidden taxes.
Replacing smart meters is yet another airhead scheme from “Enough is Enough”. Ripping out smart meters and replacing them with analog meters is revenge, not reason. Costs sunk in smart meters are best mitigated by developing better ways for consumers to get some value from smart meters. One good options is to develop scarcity-based pricing for periods of short supply.
Of all the ridiculous demands from “Enough is Enough”, the most ridiculous is the demand for immediate action. One of Ontario’s power system’s worst afflictions is it’s accumulation of quick fix Bandaids. Even the most well-intentioned corrective actions for Ontario’s electricity maladies should be done with caution and transparency.
“Enough is Enough” is correct that Ontario’s power rates are a rip-off. I’ll be joining the protesters tomorrow. My protest sign will draw attention to what might be the best way to explain to frustrated power consumers why their bills are going up and where to start to contain the disease. Save the Bala Falls.
Post Script 5 pm: MPP Jack McLaren asked me to speak at the EiE rally at Queen’s Park today. I urged people concerned about their hydro bills to learn from the organizational and research achievements of citizens groups concerned about wind power. I also urged the Auditor General to investigate the government’s moves around Hydro One privatization. I warned that electricity rates are on track for massive increases on top of those already announced and suggested that concerned citizens need to dig in for a long fight. I had a chance to meet up with many longstanding and new friends. The music was dandy. Hats off to the organizers.