Ontarians to make up for 10 years of lower hydro bills over following 20 years
The Canadian Press
Published Thursday, May 11, 2017 1:50PM EDT
Last Updated Thursday, May 11, 2017 7:02PM EDT
TORONTO -- Ontarians will see lowered hydro bills for the next 10 years, but will then pay higher costs for the following 20 years, under new legislation introduced Thursday.
Electricity bills in the province have roughly doubled in the last decade, and have sparked increasing anger among Ontarians, leading to plummeting approval ratings for Premier Kathleen Wynne.
Ten weeks after announcing a plan to lower hydro bills, the Liberal government has introduced its legislation to lower time-of-use rates, take the cost of low-income and rural support programs off bills, and introduce new social programs.
Time-of-use rates are being lowered by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers.
For the next 10 years, a new entity overseen by Ontario Power Generation will pay that difference and take on debt to do so.
Then, the cost of paying back that debt -- which the government says will be up to $28 billion -- will go back onto ratepayers' bills for the next 20 years as a "Clean Energy Adjustment."
The legislation also holds rate increases to inflation for the next four years. After that, they'll rise more quickly, as illustrated by a leaked Liberal cabinet document the Progressive Conservatives unveiled Thursday.
The Liberals dismissed the document as containing outdated projections, but confirmed that it went before cabinet at some point before the government decided to go ahead with the hydro plan.
The document shows the average bill rising about 6.5 per cent a year after rates are no longer tied to inflation and 10 per cent the year after that -- when consumers would start paying off the debt associated with the plan -- then plateauing.
From about 2027 onward, Ontario electricity consumers will be paying about 12 per cent more than they would without the Liberal government's plan to cut costs in the short term, the government document projected.
But that was just one of many projections, said Energy Minister Glenn Thibeault.
"We have been working on this plan for months, and as we worked on it the documents and calculations evolved," he said.
The government's long-term energy plan is set to be updated this spring, and Thibeault said it will provide a more accurate look at how the hydro plan will reduce rates.