Ontario rolls out Fair Hydro Plan cutting hydro bills by 25 percent

A media roundtable on Ontario’s Fair Hydro Plan was hosted by Glenn Thibeault, Minister of Energy and Sudbury MPP and  Laura Albanese, Minister of Citizenship and Immigration.

At the roundtable on March 7 the implications of the plan was discussed at the Oasis Convention Centre in Mississauga.

Laura Albanese served as the mediator while Minister of Finance Charles Sousa and Dr. Shafiq Qaadri, MD and MPP, Etobicoke North, were present.

Ontario premier Kathleen Wynne earlier said: “We are here today to talk about the high cost of electricity in Ontario…it’s time to fix those mistakes…Electricity is not a frill – it is an essential part of our daily lives….everywhere I go, I hear from people worried about the price they are asked to pay for hydro and the impact it has on their household budgets.

"It’s not just some people, and it’s not just in some places…it’s everyone and every corner of the province.”

Thibeault said 25 percent reduction in the hydro rates starting this summer would benefit the households, small business owners and the farms and people with low income with receive even further reduction in hydro bills.

Asked about the large businesses in Ontario who do not qualify to receive 25 percent reduction plan and are either moving out of the province or out of the country as they find it difficult to pay the soaring cost of the hydro bills, he said those businesses who do not qualify in the reduction plan would be covered under Industrial Conservative Initiatives (ICI).

Earlier these businesses- also called Class B Customers- were required to use 1 megawatt of power or more to qualify for this initiative. By lowering their limit to 500 kilowatt of power their electricity bills would be curtailed to one-third if they still participated in the ICI program.

He added that those businesses who do not qualify for ICI program would still see reduction in their hydro bills and said large businesses would see 4 percent reduction and small businesses would see 3 percent reduction in hydro rates.

When asked about the source of revenue to keep the generators running, Thibeault replied that there were two kinds of programs for these.

“First one is the social programs which includes Ontario’s Electricity Support Program, Rural Rate Protection Plan (RRPP), Affordability fund and On Reserve First Nation Rate. All these are social programs and are rate based which means that the electricity payers were paying for these. We pulled that off from the rate based and put them on the tax-base  because it was believed that now we are in good financial position. That would cost us about 2.5 billion dollars over three years.”

On the Affordability Fund the minister said the aim of this Fund will be to provide financial assistance to the customers of Local Distribution Companies (LDCs) who do not qualify for the low-income conservation programs.

He added that the province and Hydro One would join hands with other LCDs to establish a Trust to serve as the administrator of the Affordability Fund. These provincial revenues would also fund First Nations On-Reserve Delivery Credit.

“The second piece we are talking about is 25 percent reduction in hydro rates which we would be getting by remortgaging our Global Adjustment ((GA) fees. GA fees is basically the program in which we buy and pay for all our generating stations that need to run at  near capacity all the time to meet basic demand. For doing this we have extended the mortgages from 20 years to 30 years and that saves us significant amount of money and we are making significant reductions but we are extending our payments for over an extra 10 years.”

Thibeaut added the government would introduce legislation which could enable the IESO and OPG to work together to refinance the GA over a longer period of time.  The refinancing of GA would to a large extent, added Thibeault, prevent the big Ontario Businesses moving to other provinces or outside the country.

He also assured that over the next four years rate increase would be held to the rate of inflation for everyone and this would be the single largest electricity rates in Ontario’s history.

Thibeault said, “Ratepayers across Ontario have been loud and clear—we need to do more to help reduce costs…These new measures would have a significant impact on your monthly hydro bill and would help the most vulnerable.”

To relieve the burden on the today’s ratepayers and share costs more fairly Ontario Electricity Support Program (OESP) will be funded by the government instead of the ratepayers. Thibeault said about 800,000 customers would benefit foam the province’s plan to expand the Rural or Remote Rate Program (RRRP). This in turn would provide distribution charge relief to additional customers served by LDCs with the highest rates.

(Reporting by Asha Bajaj and Suman Das)

Image: Glenn Thibeault  Twitter