Ontario electricity rates to rise 33% in three years under long-term energy plan

TORONTO – Ontario homeowners face a 33-per-cent hike in electricity rates over the next three years, but that’s lower than a previous government forecast, Energy Minister Bob Chiarelli said Monday as he unveiled the Liberals’ long-term energy plan.

The average homeowner will pay about $100 a year less than they would have if the Liberals hadn’t killed plans to build two new nuclear reactors, renegotiated a green energy deal with Samsung and started paying wind farms not to produce electricity when it’s not needed, said Chiarelli.

“Significant ratepayer savings will be realized as a result of reduced feed-in-tariff prices, the ability to dispatch wind generation, the amended (Samsung) agreement and the decision to defer new nuclear,” he said in the report.

The Progressive Conservatives accused the Liberals of putting too much “good news” spin on their energy plan.

“This government has a lot of nerve to come into this assembly today and tell Ontarians that they are not going to be paying as much as they had originally projected,” said Progressive Conservative energy critic Lisa MacLeod.

The average household electricity bill is expected to climb from $125 this year to $167 by 2016, according to the report.

The $1.1 billion the Liberals spent to cancel two gas plants in Oakville and Mississauga prior to the 2011 election will be more than offset by nearly $16 billion in reduced spending in the new plan from the 2010 version, added the minister.

“Our plan will continue to put rate mitigation at the forefront of all energy policy decisions,” Chiarelli told the legislature.

Households that have signed up for the Peaksaver Plus program — which allows the Independent Electricity System Operator to turn down demand from air conditioners, hot water heaters and other appliances — lowered their bills an average of nine per cent, said Chiarelli. It will be expanded to the commercial sector as well.

The Liberals will proceed with the refurbishment of nuclear reactors at the Darlington and Bruce generating stations starting in 2016, and plan to shutdown the Pickering nuclear station by 2020 at the latest.

However, the new plan also calls for the government to go slower as it phases in more renewable sources of electricity, although Chiarelli said the province will be looking to contract more wind power next year.

A key part of the revised plan includes what the government calls “on-bill financing for energy efficiency retrofits” starting in 2015, which would provide loans for home renovations that would be paid back through electricity bills.

It was not clear if there would be interest-free loans for new windows and energy efficient appliances or if homeowners would have to pay some costs up front.

“We haven’t put the details together,” admitted Chiarelli. “The cost of financing over time will be paid for by savings.”

The Liberal strategy won’t bring hydro rates under control or bring back lost jobs, but it will drive more companies out of Ontario, warned PC Leader Tim Hudak, who also lashed out at the New Democrats for supporting the minority government.

“This is a government that’s actually doubled hydro rates and chased 300,000 manufacturing jobs out of the province,” said Hudak.

“Half those job losses and half those rate increases should be on the back of (NDP Leader) Andrea Horwath and the NDP because they keep propping up the Liberals.”

Horwath said Ontario families and businesses pay the highest electricity rates in Canada because of the Liberal government’s policies.

“This doesn’t look like a plan for affordable power,” Horwath told the legislature. “It looks like a desperate government trying to hold on to political power.”

Horwath attacked the Liberals for spending $180 million on nuclear plants that were cancelled, nearly $1 billion on nuclear refurbishment plans “without a final price tag,” and $1.1 billion spent to cancel two gas plants “to save a couple of Liberal seats.”

“How can the premier expect the people to believe that this government has a plan to make electricity affordable,” asked Horwath.

Nuclear will remain the largest component of Ontario’s electricity mix, but fall to about 42 per cent by 2025 from around 56 per cent as renewable energy sources make up a larger part of the supply.

Note to readers: This is a corrected story. An earlier version had an incorrect rate of increase in electricity bills.