The Ontario Energy Board (OEB) says it is “committed to increasing energy literacy and providing consumers with reliable information.” As part of this commitment, it has published a rate comparison report here. The OEB’s report appears to be a reply to my power rates comparison analysis available here and published three days before the OEB’s.
There are five problems with the OEB’s version, all of which have the effect of understating the power rate problems most Ontario consumers face.
1. The OEB’s page showing “Estimated Total Bills in Canada/U.S.A.” relies on Hydro Quebec’s cherry picking of high-cost outliers, a deficiency I address in more detail in my Nov. 14 post.
2. The OEB’s Ontario average residential rate shown in the chart “Average Price in Canada/U.S.A.” appears to be arithmetic average rather than a weighted average. The lower cost utilities in Ontario are almost all small and therefore make the arithmetic average and the median are both much less than the weighted average. I would prefer to use the actual weighted average, but I actually use Toronto Hydro’s rates as a proxy for the weighted average, following the method long used in the past by Ontario Hydro and OPA planning reports. (A better method would use a weighted average reflecting the regular regulated price plan customers as well as lower OESP customers rates and higher retailer contract prices, but I don’t know where to get the required data.)
3. The OEB’s “Ontario average” appears to include Cornwall and Kasheshewan rates, which are reflective of different institutional circumstances than apply in the rest of Ontario and have much lower rates.
4. The OEB’s Ontario price in the Ontario vs. US rate comparison does not use 2016 rates, as in the “Estimated total bill” chart, and in so doing includes the Ontario Clean Energy Benefit (OCEB) cost shift. Current rates don’t reflect OCEB and even if they did, I’d be reluctant to include OCEB except with a big red flag around any figure it touched.
5. Notice that the OEB’s bar chart “2015 Estimated Breakdown of Ontario’s Average Electricity Cost (cents/kWh) for Residential Rate Class” remarks that the Debt Reduction Charge was removed in 2016 but does not mention that the OCEB was also removed at the same time.
The OEB’s major point is that “Ontario’s rates are not particularly high compared to the US – if Ontario were a state, it would rank 24th.” Properly compared using as close as possible to the weighted average cost and excluding OCEB, Ontario’s rates are 13% above the average for the contiguous U.S., exceeded by 10 U.S. states.
The OEB report is yet more government spin designed to downplay the extent of Ontario’s power cost problems. The report appears designed to support repeated government spin from spokespeople like Dianne Saxe to the effect that residential rates in Ontario are average for North America.
It might be understandable if such carefully crafted but misleading spin was pumped out by the Ministry of Energy, but it is inexcusable for a public utility regulator that is supposed to be protecting the public interest to be publishing such junk.