Ontario to End Hydro Rate Freeze
Shortly after taking office, Premier Dalton McGuinty announced the lifting of the price cap on residential electricity. The move followed the release of a report by former Provincial Auditor Erik Peters on the provinces financial position, revealing a $5.6 billion deficit.
The previous Eves government had capped rates at 4.3 cents per kilowatt-hour last November. However, the actual cost of electricity was higher. The Peters report found the cap cost the provincial treasury almost $2 million per day, and accounted for $700 million being added to the provincial deficit.
In announcing the end of the price cap, Premier McGuinty said it would be replaced by a price regime that better reflects the true cost of electricity. The job of designing the new price structure has been assigned to Energy Minister Dwight Duncan, who was given 30 days to report back to cabinet.
The Minister outlined five principles to guide preparation of the new rate plan:
Prior to the cap being implemented last November, many low-income and vulnerable households faced hardship and uncertainty as prices fluctuated wildly. The inability to pay high electricity costs resulted in a large number of evictions and prompted some utilities to cut off delinquent customers.
While no formal consultation process was established for public input, interested parties can provide their comments and suggestions by emailing: email@example.com.
For more information, please visit: http://www.energy.gov.on.ca/index.cfm?fuseaction=english.main
United Ways of Ontario's Government Relations Bulletin - Issue
dd Nov. 7, 2003
Page last updated Nov. 7, 2003