The Financial Accountability Officer of Ontario, Stephen LeClair, says a government plan to reduce hydro costs will cost the Province $45 billion over 29 years while providing overall savings to electricity ratepayers of only $24 billion.
This results in a net cost to Ontarian hydro users of $21 billion.
Titled "An Assessment of the Fiscal Impact of the Province’s Fair Hydro Plan", the report, released today, reviews how Ontario’s Fair Hydro Plan (FHP) will impact electricity ratepayers and Provincial finances.
Under the FHP, average electricity bills are projected to decrease by 25% this year, followed by four years of growth at the rate of inflation.
Starting in 2021, electricity bills are projected to increase by 6.8% annually until the end of 2027. After 2027, electricity bills are projected to be an average of 4% higher under the FHP than the status quo.
The estimated $45 billion cost to the Province assumes that the Province is able to achieve and maintain a balanced budget over 29 years. If the Province is required to fund the FHP through debt, then the cost to the Province could increase to between $69 billion and $93 billion.
“Temporary savings are achieved for electricity ratepayers by moving costs to the Province and by deferring $18.4 billion in electricity costs for 10 years,” says LeClair. “After 10 years, ratepayers will be required to repay the deferred electricity costs plus approximately $21.0 billion in interest which will result in higher electricity bills than under the status quo.”
Ontario PC Leader Patrick Brown said in a news release, “Kathleen Wynne’s unfair hydro plan is a sham. The government’s own numbers confirm it and independent experts confirm it. Rates are going up – period,” he said . “It’s time for Kathleen Wynne to stop covering up the truth – under her plan, our hydro bills will go up. Everything will cost more. This will have a devastating impact on household budgets and the economy.”
“This is shocking. The Liberals have known all along that hydro bills will increase next year, then by a whopping 12% year over year starting in 2028,” said PC Energy Critic Todd Smith. “To make matters worse, the Liberals are bringing back the debt retirement charge which will cost Ontarians four times more.”
Nipissing MPP Vic Fedeli continued, "This comes as no surprise. The Ontario PC Party has been pointing out the countless holes in this scheme since day one. It’s time for the Wynne government to stop covering up the truth – under their plan, our hydro bills will go up and everything will cost more. This plan will have a devastating impact on household budgets and the economy.”