Electricity rate changes

The November 25 announcement by the Minister of Energy was a first step in bringing stability to Ontario’s electricity system. The changes should encourage investment that will assure long-term supply of electricity for Ontario.

Below are some examples provided by the Minister of Energy of how the proposed legislation would affect Ontario households.

Individual increases would vary with actual consumption. On an average basis, 45 per cent of Ontario household consumers use less than 750 kilowatt hours per month. These consumers would see an increase of about $5 a month.

Other examples are:
• One person, living in a 600-square-foot apartment, with no air conditioner, and with natural gas water heating and electric baseboard heating, using 750 kilowatt hours a month, would see a six per cent, or about $5, increase per month.

• Two people, living in a 1,000-square-foot townhouse without air conditioning, and with natural gas space and water heating, using 700 kilowatt hours a month, would see a six per cent, or about $5, increase per month.

• Two people, living in a 1,000-square-foot townhouse, with central air conditioning, natural gas space heating and electric water heating, using 840 kilowatt hours a month, would see a 7.5 per cent, or about $7, increase per month.

• A family of four living in a 1,200-square-foot semi-detached house, with electric water heating and a window air conditioner, using 1000 kilowatt hours a month, would see a nine per cent, or about $9, increase per month.

• A family of four living in a 2,000-square-foot detached house, with central air conditioning and electric water heating, using 1,500 kilowatt hours a month, would see an 11 per cent, or about $15, increase per month.

• Two people living in a 2,000-square-foot detached house in Northern Ontario, with electric space and water heating, using 3,800 kilowatt hours a month, would see a 13 per cent, or about $50, increase per month.

These rate changes only reflect the increase from the 4.3 rate in the cost of power, they do not reflect increases that the local distribution company ( LDC) may add. The cost of Transmission of electricity is not expected to increase but this may come in the future as Hydro One improves its grid reliability and capacity.

The distribution portion of the electricity bill had been frozen by the previous government leaving LDCs with no ability to cover inflationary costs Also frozen was the ability to recover costs related to restructuring and Bill 210 costs ( regulatory assets).

The recovery of these costs will be phased over 4 years and will likely be in the order of 2/10 of a cent per kwh at the high end. Beginning in March 2005, LDCs will also be able to adjust rates based on Market Based Rate of Return – the money LDCs need for infrastructure and shareholder debt payment. The Ontario Energy Board must approve these rate changes.

An integral part of the government’s plan for consumers is to provide users with the ability to manage their consumption. Conservation is a major part of this effort and this can be met through more efficient appliances and fixtures.

Another tool for controlling cost is to give the consumer access to metering devices that show the actual cost of electricity at different times of the day. North Bay Hydro is presently investigating ‘pay as you go’ metering that has been so successful in places like Woodstock, Ontario. For more information go to: www.infoenergy.net