TORONTO - Ontario's Liberal government sent the wrong signal by giving people 10 per cent off their electricity bills because it discourages conservation, Environmental Commissioner Gord Miller said Tuesday.
The Liberals introduced the so-called Clean Energy Benefit last January after they came under heavy fire for soaring hydro bills, which the government says will jump 46 per cent over five years.
The Clean Energy Benefit is "no benefit to the cause of conservation" and is really just an artificial subsidy, said Miller.
"The problem with the 10 per cent (cut) is it means the people who use the most energy get the most money back and that is a disincentive, a perverse incentive," Miller said as he released his annual report. "It rewards and encourages increased consumption."
One consequence of 10 per cent cut in bills is an increase in overall electricity consumption of more than one per cent, which Miller said would "wipe out" the savings that conservation programs are expected to provide over the next three years.
Environmentalists agreed with Miller's findings.
"The clean energy benefit reduction makes no sense, it encourages wasteful consumption," said Jack Gibbons of the Ontario Clean Air Alliance. "We really need to have prices that tell the truth on those hot summer days to encourage people to reduce their electricity consumption and buy more energy efficient air conditioners."
Miller was similarly unimpressed with promises by the Progressive Conservatives and New Democrats to remove the eight per cent provincial portion of the HST from electricity bills if they win the Oct. 6 Ontario election.
"I think it should be taxed to express the full cost to consumers so that they will see the value of conservation," he said. "If you're going to give a credit back or a direct payment back to everybody is one way of taking the sting out of those increases, but I really think any energy good or service should be taxed in the appropriate way."
The environment watchdog admitted he doesn't have to face the political fallout from his ideas, but warned politicians are doing people a disservice by protecting them from the true price of electricity, which he believes would prompt more to conserve.
"Electricity policy has become a controversial and complicated political battlefield on which the fog of war greatly obstructs our view of what is really going on," he said. "We want the price to reflect realistically what it should be to have a long-term and stable resilient electrical system. And we're not right now."
Ontario has "the most aggressive energy conservation program in North America," said Premier Dalton McGuinty.
"We need to balance that drive and that sense of purpose with an understanding of where Ontario families find themselves," said McGuinty. "So we're moving ahead, we're putting in place energy from renewables, we're building new generation, more transmission lines and we're also mindful of the impact that has on electricity bills."
The New Democrats said the 10 per cent cut in hydro bills was a ploy by the Liberals to try and get re-elected this fall, and called on the government to do more to promote conservation programs.
"They're in an election period and know they're in deep trouble, that's why they've thrown all that money at the problem," said NDP environment critic Peter Tabuns. "But in the end that's not going to solve people's problems and it's not going to solve the electricity problem in this province."
The Green party agreed with Miller about the lack of attention on conservation.
"They allowed the home energy savings program to expire, which was the most successful conservation program in the province," said Green Leader Mike Schreiner. "Over 150,000 Ontario households used that program to reduce their energy use and save money on their bills."
Miller also praised the government for introducing time-of-use pricing for electricity, but warned the subsidies undercut the impact of the new pricing scheme.
However, he said a promise by the Progressive Conservatives to let people opt out of time-of-use pricing could work for a while, but predicted everyone would be on the new pricing plan within five to 10 years.
"If we have to have some flexibility in the short term in terms of implementing it, I think that's workable, it's doable," said Miller. "I think if you price the various (peak and off-peak) rates appropriately, everyone will be scrambling to be on time of use."
The commissioner also questioned a decision by the Ontario Energy Board to freeze conservation budgets for Union Gas and Enbridge Gas Distribution after the government cancelled its own program.
