Plug me into something

Notice anything about your hydro bill recently? Prices are up, year-over-year, anywhere between 9 per cent and 14 per cent depending on time-of-day usage. The biggest increase, 14 per cent, is for off-peak. So much for doing a load of laundry at 10 p.m. to save money. And it’s only going to get worse. Ontario used to have a ready supply of the cheapest power in North America. Soon we’re going to be among the jurisdictions at the top end. The cause? Decades of poor management and worse political oversight.

The original goal of Ontario Hydro, back in 1906 when Adam Beck founded the electric power system, was public ownership selling power to consumers at cost. Now we’ve got the worst of all worlds; it’s still public but there’s no accountability. Hydro can run up huge debts and users must pay. In 1995 the Mike Harris government set up a commission of inquiry under former federal finance minister Donald Macdonald to see how competition could be introduced to the system. Macdonald had done a much larger Royal Commission in the 1980s that led to free trade but politics trumped him this time. After Macdonald’s report, Harris took a few tentative steps toward privatization, then his successor, Ernie Eves, who was premier for about five minutes, cancelled everything.

The government of Dalton McGuinty made matters worse by cancelling low-cost coal-fired plants. It’s all well and good to care about our air quality, but Ohio and Michigan still have coal-fired plants. The prevailing winds bring their pollutants across southern Ontario, so there’s no improvement. Two new gas-fired plants were cancelled to win a couple of seats in an election at a cost to taxpayers of $1 billion. Prices paid for solar and wind are so far out of whack that I read about one householder who sells his solar power into the grid, gets an annual return of 10 per cent on his investment, and will send his child to college with the proceeds. 

Parker Gallant, a retired TD banker who now blogs for Energy Probe, keeps a close watch on the atrocities that are being committed. Here’s a small sampling of his findings. Since they were first introduced, off-peak rates have increased 140 per cent, moving them ever closer to on-peak rates. Taxpayers have ponied up $12 billion to pay down the stranded debt of $7.8 billion – but there’s still $3.9 billion to be paid. The number of employees at Hydro One is up 1,700 or 39 per cent since 2005 even though they distribute less power now than they did then. Pricing has become so weird that when you conserve energy your local distribution company can apply to the Ontario Energy Board for a rate increase because they lost revenue. And finally, my favourite boondoggle, according to Gallant we pay to build meteorological stations at wind developments to monitor power they might have produced, but we can’t use, and pay for it anyway.

It’s clear that no politician of any stripe can control the run-amok engineering culture that produces our electric power. The answer is simple; follow the same procedures as natural gas used for heating our homes. Private companies control the assets, regulators set the rates, and end users know where they stand.