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New Year Brings Increase to Hydro Rates

Let me begin by wishing everyone a happy, healthy, and prosperous 2016.  In addition to being the start of a new calendar year, this January 1st will also mark the date of another unaffordable hydro increase for Ontarians.  This time, because of poor Liberal policy making, the cause of the increase is a combination of factors. First, the loathsome Debit Retirement Charge (DRC) was finally removed by the Liberal government from energy bills. Second, the Clean Energy Benefit expired, ending the rebate program created to counter the skyrocketing cost of energy. However, as a net result, residents of Ontario will see their hydro bills increase by about $100 dollars per year on average.  Let me explain.

The DRC was originally intended to pay off the stranded debt of the former Ontario Hydro; unfortunately, in recent years the DRC had become an inexplicable monthly levy on the bills of hydro customer. The DRC was applied at a rate of .7 cents per kilowatt hour (kWh) of usage, or about $5.60 to $7.00 extra on the average monthly bill.  Add the HST on top, and the DRC generated about $1billion in revenue for the government annually.  In 2011, the Auditor General of Ontario reported that the Liberal government had already collected all of the $7.8 billion owed by the former Ontario Hydro. Yet, it has taken another five years for the government to stop collecting the DRC.

Facing the potential loss in revenue of the DRC, back in 2014 the Liberal government also announced that it would stop providing the energy bill rebate, known as the Clean Energy Benefit, which reduced hydro bills by 10 percent.  As a result, ratepayers will now pay 10 percent more, or about $15 per month. This means that the $5 to $7 savings from cancelling the DRC will be eaten up by the $15 increase.

While the government will praise themselves for eliminating the DRC for residential users, the cancellation of the Clean Energy Benefit will eliminate any savings for hydro users.  Coupled with the hydro rate increases that occurred on November 1st, 2015, average Ontario families will continue to struggle to pay their hydro bills.

The Wynne Liberal’s mismanagement of the electricity file has cost Ontarians billions of dollars.  The Auditor General confirmed we have already been overcharged $37 billion, and we will continue to be overcharged another $133 billion dollars over the next 17 years.

Energy affordability is fast becoming the most important issue in Ontario.  The cost of living is already too high for many Ontario families.  Ontario needs policy makers in government who are looking for ways to help families thrive, not make essential needs, like heating and electricity, more expensive.

I certainly hope that in 2016 Kathleen Wynne’s Liberal government will finally listen and show a willingness to change direction with their energy policy.  If not, ratepayers in Ontario will continue to suffer from now until the next election.

Questions? Comments?

As always, I very much appreciate hearing from you and I will continue to welcome your questions and concerns. I can be reached by phone:  (519) 337-0051, email bob.baileyco@pc.ola.org, through my website at www.bobbaileympp.com, or on facebook at facebook.com/BobBaileyMPP