By Gerry Barker
Posted Decenber 5, 2015
Ontario’s Auditor General, Bonnie Lysyk, reports that Ontario users of power were overcharged by more than $37 billion in eight years. This is a stunning analysis of a utility that has been mismanaged by the Liberal government under Dalton McGuinty and Kathleen Wynne who were in charge.
Frankly, we believe Ms. Lysyk before Wynne or McGuinty. This is part of a huge series of mismanagement events by the present Liberal government headed by Kathleen Wynne.
My wife and I looked at our July/August Guelph Hydro bill that covers power costs and were astonished to see we paid a net $506.52 after the $56.28 “Clean Energy Benefit” rebate.
Now this doesn’t include the water portion of the hydro/water bill.
Home sweet home costing $1,500 a year for power.
We are just two adults living in a 2,800 square foot home and our hydro bill was 29.6 per cent higher in May and June compared to last year.
In all the years we have lived on this planet, we have never had a two-month increase in the use of power billed in this statement. Maybe we were power gluttons and we were using too much power at the wrong times. Nope. The highest usage was in the off-peak period in which we used 1,831.25 Kilowatts costing $146.50.
Now that’s the period from 7 p.m. to 7 a.m. In 12 hours we’re asleep for 8 of them. The power during that period draw is for the airconditioner, standby power for appliances and two fans for distribution of air in the home.
We have a natural gas water heater, gas fired furnace and fireplace, gas dryer and gas barbeque.
So where is the money going?
So, we checked with some friends about the differences they experienced between the July and August Guelph Hydro bills from the same period the two months before. The comparison is for the base power cost not including the HST. Here is a snapshot of our survey.
Barkers – two persons – Net increase: $119 = 29.6% increase
Home A – single person – Net increase: $92 = 28.7% increase
Home B – two persons – Net increase: $113 = 36.8% increase
Home C – single person – Net Increase $66 = 23%increase
Home D – two persons – Net increase: $82 = 29% increase
Home E – two persons – Net increase: $79 = 61.4% increase
Home F – two persons – Net increase: $111 = 27.7% increase
Home G – two persons – Net increase: $101 = 51.3 increase
The surging price growth of power in Ontario
In this brief survey there is a similar pattern of substantial increases in the cost of power. In our case, there was a slight per KWh increase over the same billing period in 2014. The summer of 2014 was much warmer than the recent July/August period. Since that time we have monitored two billing cycles and our electricity cost has remained in the same range. These past four months, our electricity bills have remained steady at about $125 per person per month, or on average, 20 per cent higher than 2014.
Now the government has announced a $17 billion retrofit of the six Bruce nuclear reactors. Next comes another multi-million dollar retrofit of the Darlington reactors.
With the gradual sell-off to private investors of Hydro One, it has already been announced that new management is planning to consolidate the 74 small municipal power distribution systems. Read that buy them out. A leading candidate for consolidation, Guelph Hydro is controlled by a separate corporation called Guelph Municipal Holdings Inc (GMHI). Guelph Hydro is municipally owned, it means that the board of GMHI can accept an offer to sell the utility. But it must still be ratified by city council, the majority of which will support the sale.
What’s Guelph Hydro worth? Probably the utility has a book value of at least $150 million. That’s why the former chair of GMHI, mayor Karen Farbridge, manipulated control in order to sell it and use the money to fund her past and present agenda. That was before she was defeated at the polls.
This is causing province-wide distress
Before you have a heart attack over all this, let’s look at the back of the hydro bill where the explanation of charges is found.
The first is for electricity. It is the cost of power supplied to us and is subject to competition. Well, what does this mean to we power consumers? The province has made deals with a number of corporations to develop sustainable energy sources that range from windmill farms to hydroelectric generators to nuclear power to solar power arrays.
Many of these privately-owned generation operations have been awarded 20-year contracts guaranteeing a KW rate that exceeds what the Ontario Power Generating Corporation (OPGC) charges municipal untilities. That’s why we receive this “Clean Energy Benefit.” If the OPGC charged what they pay those mostly privater clean energy suppliers, our power bills would be through the roof.
How does the Wynne government expect to attract business and manufacturing to Ontario with these sky-hight electricity costs?
If you can’t use it, give it away
There’s another problem. Ontario is awash with power with all these private deals it has made. You cannot store power so the province sells its surplus power to U.S. jurisdictions at less than cost. But we are still paying for it.
So consumers are left holding the bag. Just think about the decision to charge the HST for electricity, an essential service that we, in this northern hemisphere, cannot exist without.
And now the province has started to sell off Hydro One, the vital backbone of power distribution throughout Ontario. It’s like taking pennies off a dead man’s eyes. The Wynne government is going sell 60 per cent of Hydro One to private investors because they are desperate for money. The net will be less than $6 billion and will be gone in a flash to be spent on more Liberal programs including funding the new Ontario Pension Plan.
It is possible that Guelph Hydro will be sold within the next 24 months. That has the potential to be a $150 million bonanza that was planned by the former mayor when she created the off-balance sheet, Guelph Municipal Holdings Corporation. This corporation now has more than 125 employees and lost $2.8 million last year. It did manage to send a dividend of $1.5 million to the city as a dividend. That money came from the Guelph Hydro treasury. To me, this is an illegal tax on electricty.
The use of electricity was never meant to be a cash cow for the government
Next, let’s look at the regulatory fees ($18), delivery (143.40), and debt reduction ($21.02). Using our bill, it adds up to $182,42 or 57.79% of the actual cost of the electricity, ($315.64).
The final charge is for the 13 per cent HST that taxes all the above-mentioned costs on your bill.
And what do we get in return? The 10% Ontario Clean Energy Benefit that doesn’t even cover the HST charge.
These billing period increases are the price we pay for a life sustaining basic necessity. In the same bill your water charges are included but there is no HST charged for that life sustaining necessity.
Now Hydro is moving to monthly billing and the water bill will be split off and billed separately.
The government’s management of these essential services has been appalling. No wonder Ontario has the highest electricity prices in North America.
Feel free to comment on this guelphspeaks article. Make your opinion known.