​ Hydro prices in Ontario double the national average: Fraser Institute report says

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#FraserInstitute, #KathleenWynne, #GlennThibeault, #OntarioEnergyBoard, #Time-of-use(TOU)rates, #KennethP.Green, #TaylorJackson, #AshleyStedman, #ElmiraAliakbari
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Toronto, Jul 21 (Canadian-Media): Ontario Energy price Increased by 71 percent from 2008-2016, which is twice the national average increase of 34 percent, and Torontonians’ electricity bills were highest among major Canadian cities, according to a July 2017 report from Fraser Institute ‘Evaluating Electricity Price Growth in Ontario by Taylor Jackson, Ashley Stedman, Elmira Aliakbari, and Kenneth P. Green’, media reports said.

The report says, "Electricity is an essential part of our modern lives. But affordable electricity appears to be a growing challenge for Ontarians. In fact, electricity prices in Ontario have risen substantially over the last decade, placing a burden on many Ontarian households. Indeed, the province of Ontario has the fastest growing electricity prices in the country and its cities have some of the highest average residential monthly bills in Canada.”

“Ontario’s electricity prices have risen by 71 percent from 2008 to 2016, far outpacing electricity price growth in other provinces, income, and inflation…This was two-and-a-half times greater than the national average of 6 percent during the same period. … In particular, the growth in electricity prices was almost four times greater than inflation and over four-and-a-half times the growth of Ontario’s economy (real GDP), said Fraser Institute report”

Fraser Institute, with a mission is to provide Canadians with quality of life  by studying, measuring, and broadly communicating the effects of government policies, entrepreneurship, and choice on their well-being said, 

“Toronto’s monthly electricity bills (including tax) are $60 more per month ($720 more per year) than the Canadian average. Consumers in Ottawa pay $41 more per month ($492 more per year) on electricity bills than Canadians in other provinces. Montreal had the lowest monthly electricity bills for residential consumers at $83”, said the report.

My friend Shubha, a resident of Toronto shocked by the hike in Ontario hydro rate said she failed to understand how Wynne’s  government’s introduced legislation in March -- to lower the price of hydro bills by 25 percent over the next 10 years -- works.

She said, “It has become increasingly difficult for me to manage both ends meet with this unresolved electricity rate rising problem? It is high time for this to be resolved.”

Torontonians were  reported to have paid an estimated $1,000 more per year for electricity than residents in Vancouver and Calgary. (And Albertans actually saw their bills decrease in recent years.)

Torontonians paid an average of $60 more per month, lat year,  than the Canadian average of $141.

During a conversation with our neighbour Jagdish, also a resident of Toronto, Jagdish said he was unhappy when he learnt from his friend Nilesh -- who is visiting him from Vancouver -- that  the electricity bill that he receives has considerably declined. Jagdish said, "When would our provincial government bring the price of energy in Toronto closer to the national average?"

Putting the blame on provincial government’s policy options and poorly structured long term contracts for high cost of electricity, the Fraser Institute made a request to the provincial government to reform its policies to bring the price of energy down closer to the national average.

Premier Kathleen Wynne at a Liberal convention last November admitted that focusing too much on larger problems with the hydro system was a mistake. Instead, she said she should have paid  attention to consumers’ rising hydro bills.

Glenn Thibeault, Ontario’s Energy Minister, was on agreement with Wynne that hydro bills had caused burden on many families in Ontario.

Ontario's independent energy regulator, Ontario Energy Board’s – which aims at ensuring a sustainable, reliable energy sector to help consumers get value from their natural gas and electricity services – announcement last month that electricity prices will go down on July 1 due to government’s Fair Hydro Plan, applied to different customers in different ways depending on how they buy their electricity as revealed by the Time-of-use (TOU) rates, which tracks time-of-use electricity rates since 2006.

The report highlighted that energy prices increased 2.5 times faster than household disposable income, four times faster than inflation and 4.5 times faster than real GDP.

Since 2006, the price Ontarians’ pay for off-peak electricity has gone from 3.5 to 8.7 cents per kilowatt-hour – an increase of nearly 150 percent which means off-peak consumption accounts for roughly 65 percent of a residential customer’s usage.

This concept was not understood by many Torontonians, who could not understand the problem of hydro price rise.

Ottawa residents paid $41 more than the average and Montreal, Comparatively, had the cheapest electricity bills of any major city in the country, with an average bill of $83 per month, or $58 cheaper than the national average in 2016.

“Given the critically important role that affordable electricity plays in peoples’ standard of living, it is time for the Ontario government to have a hard look at how their policy choices are affecting peoples’ lives. It is also time for the government to begin pursuing meaningful policy reforms aimed at lowering electricity bills for Ontario residents” said the Fraser Institute report.

“It’s government choices that led to this consequence,” said Green, who is the senior director at the Fraser Institute’s Center for Natural Resource Studies. “Really, they have to walk back from where they are toward where the rest of the world is going, which is natural gas, nuclear power, hydro (electric power) and not wind and solar power.”

Green added that advantages rendered by cost effective option of natural gas -- which is being availed by most of Canada’s neighbouring countries and U.S.A -- should be adopted by Canada.
 
(Reporting by Asha Bajaj)

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