Mayor Meets Energy Minister to Protest Rural Hydro Rates

Mayor McFadden had ten minutes to make his point on Monday to former NDP MP Glenn Thibeault who took over the Energy portfolio last June. 

McFadden hosted a town hall last week on short notice to collect input from the community after learning he had secured an audience with the Minister for Monday.  Residents brought copies of their personal hydro bills and stories of frustration and dismay over rising rates with no end in sight.  McFadden showed the audience the township’s hydro bill for the arena –see copy left – in which a charge of $846.95 for the actual hydro used results in a final bill of $11,381.  They received a similar hydro invoice for the Waste Water Treatment Plant totaling $11,365.  He pointed out that ratepayers’ interest in getting hydro costs under control reach beyond their own residential bills. These township hydro bills are ultimately paid by residents as well, as are energy costs of local schools, hospitals and other public buildings.  It adds up quickly.

McFadden began his meeting with the Minister by explaining that the delivery costs charged on rural hydro bills was creating significant financial pressure, forcing lower income families and seniors to choose between paying their hydro bills or their food or medical bills.  He suggested that the rates should be connected to the users’ ability to pay.  The issue is a rural one, as electricity bills from Hydro One for rural customers include delivery charges that are not found on urban bills from local utilities, making hydro much more expensive for rural clients.

Another issue raised was the global adjustment charge on non-residential bills like those received by the township.  Introduced in 2005, this charge is designed to cover the gap between the price paid for hydro purchased by Ontario Hydro and the actual market rates for electricity.  It is embedded in the time-of-use rates for residential bills, but for others like the township, it is shown in a separate line on their hydro bill.  According to Auditor General Bonnie Lysyk, the global adjustment charge accounted for roughly 70 per cent of consumer’s electricity rates in 2013, and she has asked that this component of hydro bills be explained more clearly for consumers.  She estimates that between 2006 and 2015, the 10-year accumulative actual and projected global adjustment totalled about $50 billion.  The Ontario Energy Board has refused to do so, and the province is not pushing them to comply.

McFadden applauded the provincial government’s suspension of its Large Renewable Procurement (LRP II) under the Green Energy policy last fall, when they halted the procurement of over 1,000 megawatts (MW) of solar, wind, hydroelectric, bioenergy and energy from waste projects.  The suspension was a good start, but did not go far enough, according to the Mayor.  He asked the Minister to stop other projects that have been approved where construction has not begun, including the two wind projects in the Bethany and Pontypool areas, saying they will produce energy the province does not need and will contribute to the global adjustment gap as we pay up to $.80 for power we can only sell for $.02.

Another cost-cutting suggestion he offered to reduce the cost of Hydro was to re-examine executive salaries at Hydro One, starting with the CEO whose annual compensation package approaches $4 million.

The Mayor also pointed out that the new 2.5 cent per litre gasoline tax recently announced to fund transit costs represents a subsidy paid by rural residents who have no access to transit that will increase the costs of their own transportation which relies on gas.

The Minister offered to educate the Mayor on the profitability of hydro sales to the US, and told him to expect some relief in the upcoming provincial budget. KG

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