The Ontario government’s management of our province’s energy file has been an abomination.
Here are the top five government blunders that contributed to higher energy prices:
1. Debt Retirement Charge
When the former Ontario Hydro utility was dismantled in 1999, it handed an astonishing $38.1 billion in debt and liabilities to the Ontario Electricity Finance Corporation. That debt was to be paid off by ratepayers through the “debt retirement fee”. This debt would have long since been retired, had it not been for a loophole that allowed the Liberal government to redirect these funds for other purposes rather than actually paying off this debt. This debt is now not projected to be paid off until 2016.
2. Green Energy Act
Former premier Dalton McGuinty’s green pet project has been nothing short of a disaster. It closed all the province’s low-cost coal production plants and replaced them with highly subsidized solar and wind farms. Aside from being disruptive eyesores in many communities, these new “renewable” energy sources are far from reliable and therefore required backup electricity plants to be built. This also means Ontario produces too much energy, and is forced to sell excess electricity at a loss, or sometimes even pay producers not to produce energy.
3. Global Adjustment
The Fraser Institute recently released a report that zeroed in on the Global Adjustment as a major factor in higher energy prices. This charge on your electricity bill, (or the Orwellian-sounding “adjustment” as it were) claims to pay for conservation programs, but it also includes a fee to cover the costs of subsidies to green energy producers. According to the Fraser report, the Global Adjustment is the leading factor in rising electricity costs over the past six years.
4. Employee compensation
Last December, an Auditor General’s report revealed the culture of entitlement and lucrative compensation benefits for employees at Ontario’s hydro utilities such as Ontario Power Generation (OPG) and Hydro One. It was later hinted by the finance ministry that these costs affect hydro rates, and the lack of sustainable funding in hydro pension plans could cause significant rate hikes in the future.
5. Gas plant fiasco
As we learned from the 2013 Auditor General’s report, the price tag for the Liberals’ political decision to cancel two gas plants is up to $1.09 billion. Hydro ratepayers across the province will cover the tab for the cancelled plants over the next 20 years — meaning the sting to taxpayers for such gross misconduct will long be felt. When you open up your next hydro bill, remember, this is just another way you are paying the price for mismanagement, insider deals, deception and waste at the hands of the provincial government.