Rate Increase Deferral – Nov 2016 (Podcast)

Linked here is a podcast discussing the Ontario electricity commodity price non-change for November 2016 along with a rough timeline of the interview contents.

The podcast is available here. Select October 20, 1 pm.

The commodity portion of residential power bills is referred to in Ontario as the Regulated Price Plan or RPP. I tried to keep that jargon out of the interview so that it is easier for listeners to follow what is happening, but if you want to look up more information, the official title might help.

Time stamps and summaries noted here are approximate.


Wby did the rate freeze happen?

It is a temporary reprieve only. Costs decreased a little in November 2012, so this rate freeze is not unprecedented.


Factors present today that will drive up rates up at the next rate adjustments:
– recovery of costs of the “Industrial Conservation Program”, a cost shifting program that benefits industrial customers at the expense of residential and small business consumers
– OPG’s rising but delayed rates, which the OEB has assumed will no rise for the purpose of determining the November until May rates.


Why is this happening now?

Once upon a time, the OEB was independent. Now, the freeze decision looks fishy. In the longer term, ignoring temporary cost deferment isn’t very important because ultimately costs come home to roost


Why is Wynne admitting that power rates are a problem now?

Electoral politics are directly driving the government’s decisions. Public understanding of the connection between rising power rates and subsidized export is shaking public confidence in the government’s management of the power system. Another factor is that electricity costs are being recognized as a threat to housing security for low-income consumers. Although the Ontario government is starting to understand that electricity costs matter, the government is still expanding its solar power program at ridiculous cost through FIT 5 (150 MW at prices up to 31 cents/kWh).


Is monthly billing worth it?

I support monthly billing on the grounds of greater consistency of billing practices between utilities and better consumer budgeting.


How can consumers understand what is going on?

The complexity of Ontario’s power system has gotten out of control. Folks can be excused for feeling frustrated at not being able to figure out their power bills. Ontario’s power system was not set up to keep you informed.


For more information on the temporary rate freeze, I recommend this post from Scott Luft.