WATCH ABOVE: Alan Carter breaks down how your hydro bills is going to change.
TORONTO – The Ontario government announced Thursday a hydro electricity rebate for low-income households making $50,000 or less but others will see their bill rise.
The province says the financial assistance program will come into effect Jan. 1, 2016 along with the removal of the “debt retirement charge” users have been paying for 10 years – roughly $5.60 a month.
“We recognize that low-income families can have a difficult time during the winter months,” Ontario Energy Minister Bob Chiarelli said during a press conference Thursday morning.
A family of four with a household income of $28,000, for example, may now save up to $455 a year on their bill.
However, hydro bills will reportedly rise for those households with combined incomes higher than $50,000 to help fund the new program.
The Ontario Clean Energy Rebate also expires at the end of the year which has been bringing down the residential hydro bills by 10 per cent.
This means average households are now expected to see their bills rise by $120 a year in 2016, the province said.
“What I believe, first of all, is that it’s going to be much more than $0.70. I mean, I think people have to brace themselves for serious increases in their hydro rates,” NDP Leader Andrea Horwath said.
The combination of expected increases, the removal of the clean energy benefit, and a possible privatization of utilities will lead to significantly higher costs.
“Even low income people are not going to see a benefit from this announcement,” she said. “They may see a slight difference in terms of the amount of increase their bills are going to have, but they’re not going to have an overall net decrease.”
Chiarelli maintains energy conservation efforts will help mitigate the cost of electricity.
“This past December, utilities signed onto a new conservation framework,” he said. “They are working very aggressively at creating new ways for consumers to save on their energy bill.”
Chiarelli said consumers will be hard pressed to find any electricity system in North America that has frozen prices or have not added increases to their rates year over year.
“That is a reality in the electricity system. The inflation rate in the sector in terms of replacing equipment, life cycle needs to be recovered on the rate base, and that is done across North America,” he said.
And Progressive Conservative MPP John Yakabuski suggested hydro bills were too high for everyone.
“Do low-income people need a break on their hydro bills? Are they too high? Yes, they’re too high for everybody. But the reality is that this is going to shift some of that load to people that fall just outside of that threshold to the tune of about $137 a year.”