Under CEO Anthony Haines, Toronto Hydro has dedicated itself to the proposition that power users in the city are paying way too little for electricity. Particularly since 2011, the utility has presented a wide variety of schemes to the Ontario Energy Board (OEB) to secure approval for higher rates. The latest scheme is now officially under review by the OEB.
Under the new plan, residential consumers would see the core distribution portion of their bills rise 21% in 2015, while rates for small and medium – sized businesses would rise 19 – 22%.
The utility’s sales pitch for the rate increase, as presented by the Toronto Star, focuses on themes familiar to those following this series — diluting the distribution increase in the total bill, averaging the increase over long periods to make it seem small, claiming global warming is responsible for blackouts, aging assets, work force aging, and condo construction. As examples of previously documented refutations of some of these claims, here is a post documenting unplanned downsizing of staff and a post documenting the utility’s deliberate go-slow strategy for storm recovery.
Compared to the average distribution rates of the nine next largest urban electricity distributors in Ontario, Toronto Hydro, currently charges households 28% more, small businesses 57% and medium – sized businesses 62% more. The calculation of these amounts is in Part 114 of this series. The methodology for estimating annual bills used in Part 114 assembled all of the components of rates directly attributable to each distribution utility’s internal costs. The calculation excludes temporary rate riders, the Ontario Clean Energy Benefit, and HST.
That methodology was applied to the rate change Toronto Hydro has proposed for 2015. The calculation of the increases for 2015 is presented here. In the case of Toronto Hydro, its existing rates contain adders for something called the “Incremental Capital Module”, a cost component that will be rolled into base rates in 2015.
Toronto Hydro customers and customer organizations have a deadline of Friday September 12 to register with the OEB to formally intervene in the rate review process.
I think the fact that TH’s rates are already so high compared to the average surrounding utilities, coupled with (someone correct me if I’m wrong) proposed rate increases on the table at present that would cause TH to be even more expensive on a % basis, it would seem logical that unless TH has some extraordinaryâ€“as in quite extraordinaryâ€“justification for its abnormally high rates, this is just sheer madness.
I would think this would be front page news every other week in The Star.
Much thanks for assembling the tables in Part 114, Tom. Horizon has been touting its low rates here in Hamilton for some time. They also recently put in place what they are calling a “Smart Growth” connection policy to encourage industry to move into fully serviced but currently under-utilized areas on the distribution grid by waiving certain system connection fees. Assuming your numbers are accurate, the cost difference between Hamilton and Toronto for general service customers is substantial.