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 province’s 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:

1. The price of electricity must better reflect the true cost of electricity.
2. The price will be regulated. We are not going back to the chaos and price spikes that residential and low-volume consumers saw under the spot market.
3. We will have stable and predictable pricing, so families, small businesses and other low-volume consumers can better manage their energy costs.
4. The price will be regulated by an independent body, not by politicians.
5. The price is to be regulated on the basis of what is in the public interest – not political interests.

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: write2us@energy.gov.on.ca.

For more information, please visit: http://www.energy.gov.on.ca/index.cfm?fuseaction=english.main

Source: United Ways of Ontario's Government Relations Bulletin - Issue dd Nov. 7, 2003

* New Government, New Ministries, and New Committees
* McGuinty Moves Swiftly to Tackle Deficit
* Food Banks Struggle with Growing Hunger
* Study Cites Factors Driving Dramatic increase in Children’s Aid Cases
* Ontario to End Hydro Rate Freeze
* Commission Seeks Removal of Barriers for Disabled Students
* B.C.’s Two-Year Welfare Cut-off Challenged

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Page last updated Nov. 7, 2003