In Ontario, electricity bills are reason to weep – by Konrad Yakauski (Globe and Mail – September 12, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

If you live in Ontario, deciphering your electricity bill is like trying to crack the encryption on a BlackBerry. It might tax even the professional snoopers at the U.S. National Security Agency.

It’s not as simple as multiplying the amount of power you use each month by the market price per kilowatt-hour. Beyond your “electricity” charge, there’s a “delivery” charge, a “regulatory” charge, a “debt retirement” charge and an Orwellian-sounding “clean energy benefit.”

And there’s a twisted political saga behind each one of them. If you manage to unbundle it all, you’ll discover that the market value of the power you consume accounts for only a tiny portion of your bill. Most of the rest of what you fork out goes to pay for decades of bungled energy policy-making. And pay you will, for years to come.

Indeed, the most important charge is the one that doesn’t directly appear on most people’s monthly statements. It’s called the “global adjustment” fee and it’s tacked on to your electricity charge to cover the government’s cost of buying above-market-priced wind, solar, nuclear and gas-fired power from private operators. Oh, and part of it now goes to pay for those Toronto-area gas plants former premier Dalton McGuinty cancelled to win NIMBY votes in the 2011 election.

Ontario has managed to subvert the basic laws of supply and demand. Electricity has never been so abundant, yet Ontarians have never paid so much for it. Thousands of megawatts of new wind, solar and natural-gas generation has driven market prices to lows not seen in decades. But the cushy contracts awarded to wind and solar producers mean your monthly bill is going up.

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One Response to In Ontario, electricity bills are reason to weep – by Konrad Yakauski (Globe and Mail – September 12, 2013)

  1. norm September 12, 2013 at 10:00 pm #

    …and there is no worse place to cry than northwestern Ontario where there is a surplus of electricity (from well established hydro projects along the English and Winnipeg River systems-3% of Ontario hydro production) that cannot be moved due to transmission line bottlenecks. Our paper mills have closed, our geography is bigger, our population is a fraction and our cost of living is $7000 a year more than neighboring Manitoba. Why do we have to pay southern Ontario electricity rates when we cannot move our surplus. We should be able to use this excess energy to stimulate economic growth.