Hydro Fees

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Mayor McFadden continues his campaign to ease rural hydro rates in Ontario.

His most recent move is to circulate a resolution to all Ontario municipalities to post their most recent electricity bills on their general websites to allow residents to see the complete breakdown of all charges applied to general demand service types to clarify the size and nature of the charges in order to develop a better understanding of the costs. These bills also explain how the Energy Minister can claim that Ontario rates are lower than those of other jurisdictions: that is true when comparing the single charge for electricity at the top of the invoice, but ignores the other components of the bill including the global adjustment charges on non-residential invoices, as well as delivery, regulatory and debt retirement charges as well as HST. As demonstrated by the December hydro bill for the Arena printed in last month’s edition, the actual electricity charge was $847 on a $11,380.82 bill, representing 7.44% of the total cost of the hydro use for the facility.

This breakdown is more difficult to establish for residential consumers, as the global adjustment cost is embedded in the time of use charges. It is the fee is used to pay for the guaranteed electricity rates offered to electricity generators along with a number of other government initiatives and programs.

Budding entrepreneur Thomas van Stee has a tool to demystify the charges on residential hydro bills, which can provide an estimate of the underlying charges embedded in the line items on each bill. Recognizing the rising frustration in Ontario over electricity prices and the lack of transparency on hydro bills, he developed a tool to reveal where your hydro payments go.

The image below shows the breakdown of the components of a bill for a residential customer using roughly 1000 KWh per month. To do the same calculation on your own hydro bill, go to www.yourbill.ca and insert your information. The site provides a detailed explanation of each component of the hydro charges, including the embedded global adjustment fee which ranges from 70-90% of Ontario hydro bills depending on their category and their provider.

The twenty four year old started his company, EmPowered, after quitting his job at a Toronto consulting firm and operates out of University of Waterloo’s Velocity Garage in Kitchener, a start-up incubator.  He was attracted to the energy sector when he recognized how much the industry is hated and saw an opportunity to fix it. Artificially low hydro rates charged in the past have contributed to the dramatic increases in rates today, but underwriting provincial wind and solar power continue to fuel soaring prices.

Last May van Stee launched a bulk-buying group which helps energy consumers who use 50 per cent or more of their electricity during the day. He organizes them into groups, allowing them to purchase energy in bulk at lower rates than the 18 cents per kilowatt hour charged by Ontario Hydro. Residential peak consumption is typically less than 36% of their usage, making bulk buying not worth the effort at current prices. KG

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