Posted By CHRISTINA BLIZZARD
Posted 5 days ago
Your hydro bill calls it a "provincial benefit." In truth, it's a
sneaky way to hike electricity rates -and pass along to consumers the
high cost of all those costly "green energy initiatives."
Consumers who signed contracts with electricity retailers and thought
they'd locked in their hydro costs are suddenly finding their bills
are skyrocketing -through a line called provincial benefit (PB).
The PB isn't new. It grew out of something called the "global adjustment."
And it's now worth $4.2 billion a year, and growing.
In a nutshell, there was a need to absorb costs for non-utility
generation (basically private power generation) built in the 1980s.
When the market later "opened" it was agreed the old Ontario Hydro
baseload nuclear and some of its hydro assets would also be included
in that adjustment. That morphed into the PB.
When the price of electricity was high, the PB was a negative amount.
Now that prices are low, the PB is soaring to compensate generation
companies -at the expense of people who thought they had guaranteed
electricity contracts.
The reason it's ballooned lately is because of all the massive green
energy contracts -the so-called feed-in tariff programs (FIT) -the
government has been signing on to, said New Democrat critic Howard
Hampton.
They include high-priced solar, biogas and biomass projects.
The suggestion it's a benefit is a "disgusting misuse of the English
language," he said.
The only people who benefit are the people getting lucrative contracts
to generate electricity.
Hampton said the Ontario Power Authority (OPA) should answer to the Legislature.
"The Ontario Power Authority, a body which is completely unaccountable
and can't be called before any legislative committee, has been out
there signing hydro contracts worth billions of dollars. That's not
factored into your hydro rate. But it has to show up somehow, because
we are going to spend billions of dollars for these sweetheart deals,"
Hampton said in an interview.
If you've stayed with your local utility, you don't have that line on
your electricity bill. The utility absorbs it. Only businesses and
consumers who signed up with retailers pay.
As the price of all these green projects increases, so too, will the PB.
"The McGuinty Liberals are going to make Ontario's electricity system
probably the most expensive on the continent with huge repercussions
for businesses and individual consumers," Hampton said.
As costs mount, the PB will become a black hole to hide the soaring
cost of electricity. What is most worrying is the loss of
transparency. When the market opened, your hydro bill was broken down
cost-by-cost: Delivery, generation and retirement of the provincial
debt. Now we have this catch-all PB.
A spokesman for the Independent Electricity System Operator (IESO)
said consumers should be wary of signing retail contracts without
knowing just what they are getting.
"We are trying to provide education and awareness that before you do
sign one of the contracts you should try to understand what it is you
are committing to and look at what you are now paying for versus what
that contract offers," said Terry Young. (Check www.ieso.ca
for more information.)
So beware of signing an energy contract with a retailer. Most of them
only include the market price of electricity. You'll have to pay the
PB on top of that.
In November, then-Energy Minister Gerry Phillips said he wanted to see
more transparency in electricity bills. Let's hope Brad Duguid, who
just shuffled into the energy portfolio, actually does something about
it.
Hey, everyone can dream.
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