Premier Kathleen Wynne says rising hydro rates in Ontario have become “very burdensome” for many families in the province. Ontario’s Energy Minister, Glenn Thibeault, agrees with Wynne and says hydro bills have become too much for many families to bear.
But Thibeault has also accused Progressive Conservative leader Patrick Brown of spreading misinformation and dealing in “alternative facts” when it comes to rising energy prices in Ontario.
As politicians debate the effects of rising electricity bills on the people of Ontario, Global News has taken a closer look at just how much hydro bills in the province have really gone up over the past decade.
Increases to Time-of-Use pricing
Time-of-Use pricing, or TOU, is the price roughly 90 per cent of Ontario’s five million residential and small business customers pay for electricity. This cost is broken down into three categories: off-peak, mid-peak and on-peak pricing.
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Off-peak pricing, which applies to electricity used between 7 p.m. and 7 a.m., as well as weekends and holidays, has increased the most over the past decade.
Since 2006, the price Ontarians pay for off-peak electricity has gone from 3.5 to 8.7 cents per kilowatt-hour – an increase of nearly 150 per cent.
That means anyone who follows the government’s advice and stays up late to do laundry and wash dishes is paying more than double what they did for electricity only a decade ago. According to the Ontario Energy Board, which regulates the province’s electricity sector, off-peak consumption accounts for roughly 65 per cent of a residential customer’s usage.
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Meanwhile, mid-peak pricing, which accounts for roughly 18 per cent of average usage, has risen from 7.1 to 13.2 cents per kilowatt-hour over the past ten years – an increase of more than 85 per cent.
On-peak pricing, which accounts for the remaining 17 per cent of a customer’s usage, is the most expensive of the three categories. It’s gone up from 10.5 to 18.0 cents per kilowatt-hour over the past decade – an increase of more than 70 per cent.
In terms of the actual impact on a customer’s bill, these increases mean the average Ontarian household is paying more than double what it did for electricity a decade ago.
In 2006, the average household in Ontario spent $40.03 per month on electricity usage. That’s before taxes, delivery and any other charges. By 2016, however, this amount had more than doubled to $83.18 a month.
Increases to the Global Adjustment fee
So what accounts for the increase in pricing?
Much of these increases are the result of a growing Global Adjustment fee – a complicated fee that, thanks to a recent Ontario Energy Board decision, remains hidden on the bills of all residential and small business customers in Ontario who pay TOU pricing.
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The fee includes the cost of renewable energy contracts for wind and solar electricity, the cost of operating and refurbishing Ontario’s Darlington and Pickering nuclear facilities, as well as a number of conservation and green energy programs – such as rebates on energy efficient lightbulbs and tax credits for new furnaces.
The Global Adjustment fee also includes payments toward Ontario Hydro’s bad debts, any amount of money lost when selling electricity to the U.S., which in 2015 totalled more than $1.7 billion, and something known as “curtailing” – when the government pays energy suppliers to not produce electricity.
In total, the amount Ontarians pay in Global Adjustment fees has increased from an average of $351 million a month in 2009 – roughly $4 billion annually – to more than $1 billion a month in 2016 – or more than $12 billion for the year.
Additional price increases
There is a third factor driving up prices. Besides the Global Adjustment fee and TOU pricing, there are delivery charges and other fees associated with hydro in Ontario.
And while it’s difficult to assess exactly how much these other fees have gone up over the past decade – mostly due to the fact that delivery charges are different for each of the province’s 70 utility companies – it’s clear these fees represent a significant portion of hydro bills for many Ontarians.
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According to the Ontario Energy Board’s rate calculator, Hydro One low-density customers who use an average of 1,500 kilowatt-hours a month pay $167.09 for consumption and $113.19 for delivery.
After the Regulatory Charge and taxes – including the government’s recent 8 per cent HST rebate – the total bill for an average Hydro One low-density customer is roughly $306 a month.
Meanwhile, for a Toronto Hydro customer who uses the provincial average of 750 kilowatt-hours per month, $83.54 of their total monthly bill goes toward usage, while $51.16 covers delivery. After taxes and the Regulatory Fee, the average Toronto Hydro customer would pay roughly $147 a month
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